After releasing strong third quarter results today WPP executives told analysts that media arm GroupM and the company’s PR operations turned in stellar performances, double-digits in organic net revenue growth above results in the third quarter of 2019, before the pandemic put many businesses into a tailspin.
The creative shops also did well and VMLY&R was a particular standout, showing significant growth above Q3 2019. Other creative shops, like Ogilvy, AKQA Group and Wunderman Thompson, were “slightly negative” on a combined basis over the two-year period but still made up a lot of ground, said CFO John Rogers.
GroupM was up 14.6% in Q3 versus two years ago while the PR group posted 12.6% growth during the same period.
And the headcount for the company as a whole now matches what it was in Q3 2019, meaning that several thousand eliminated positions have now been restored given recent new business and demand for services.
CEO Mark Read said GroupM’s performance was aided by the strong bounce-back in ad spending by clients but also by smart investments in the data and technology capabilities that clients are seeking.
On the PR front Read said numerous issues—like brand purpose, politics and DE&I-- have sparked demand from clients looking for assistance. Leadership changes have also helped, said Read, noting that Hill & Knowlton had been growthless for nearly a decade prior to a recent change in management at the agency.
The company upgraded full-year guidance for a third time and Rogers said that WPP would be up 4% to 5% in 2021 versus 2019. While the company expects the current momentum to carry into 2022 Rogers said it was too early to offer any growth guidance beyond this year.
When asked about further consolidation within the company (like merging major agencies) Read said that nothing “major” was being planned for now. “There may be some tidying up on the associate line,” he said, referring to firms where WPP has less than a 50% stake. Over the past two years as the firm has streamlined operations it has disposed of interests in 55 companies.
As for privacy changes at Apple, Read said he doubted Google or Facebook would be affected. In fact, he said, the changes may “drive more spend on those platforms.” Some individual media owners may be negatively impacted, he cautioned.
The strong Q3 results drove WPP shares 8% higher on the London Exchange today.