Accelerated digital marketing investments drove another exceptional third quarter for WPP, causing the holding company to upgrade its guidance for the third time this year.
“Our very strong performance goes well beyond a cyclical recovery, with like-for-like growth over 2019 at 6.9% in the quarter,” CEO Mark Read told investors in Thursday’s earnings call.
“Clients across all sectors and geographies are making significant investments in marketing, particularly in digital media and ecommerce services,” Read said. “We are now above 2019 levels in all of our business lines, and with the actions we have taken over the last three years, we are even better positioned for growth.”
WPP’s revenue rose 9.1% in the period.
Its key financial metric, like-for-like (LFL) revenue less pass-through costs, rose 15.7% in Q3, versus forecasts of 9.5%, causing Citi analysts to term it a “blowout” performance.
The top five markets based on that metric were the U.S. (+12.4%); U.K. (+16.9%), Germany (+34.5%), greater China (+18%) and Australia (+2.4%).
WPP is now projecting 11.5% to 12% revenue growth for this year — easily surpassing analysts’ expectations of 8% to 11%.
Last year, amid the coronavirus pandemic and initial advertising cutbacks, WPP suffered a £2.8 billion loss after its revenue dove 9.3%, to £12 billion. Its revenue growth began to rebound this year, starting in April, and accelerated in subsequent quarters.
Some analysts are questioning whether In an interview with Bloomberg following the call, Read said that WPP had yet to see any impact from the global supply-chain crisis, and also believes its impact on advertising will be minimal going forward.
That jibes with the strong third-quarter advertising results at several major tech companies, including Alphabet, Microsoft and Twitter.