Three months ago when WPP reported second quarter results, GroupM was called out as one of the weaker performing units in an admittedly tough quarter for the entire industry.
At the time WPP CEO Mark Read told analysts that the company’s media arm would be come back when clients started spending again.
And he was right. Company CFO John Rogers told analysts on an earnings call today that GroupM made up a lot of its revenue shortfall in Q2, when the media arm was down close to 18%, in Q3, when it narrowed the decline to between 3% and 4%.
And programmatic arm Xaxis had an even more dramatic turnaround, swinging from a 30% deficit in the second quarter to +12% in Q3. Rogers said it was the nature of the medium that explained the big swing—programmatic campaigns can be launched or halted a lot quicker in response to economic developments and client needs.
Separately, Rogers said WPP now estimates that post-pandemic the company will cut its real estate portfolio by 10% to 20% as the holding company adapts a hybrid model where workers divide time between working at home and at the office.
WPP has been consolidating office space for the last couple of years with the development of campuses that house multiple agencies in cities around the world. It’s a program that will accelerate the company’s ability to make further cutbacks in its real estate footprint, Rogers said.