WPP reported organic net revenue growth in the second quarter of 1.3% with an organic revenue decline of 4.1% in North America. primarily due to lower revenues from technology clients. Declines in that sector have negatively impacted growth at other holding companies as well, including Interpublic Group and Omnicom.  

WPP reduced its full year 2023 organic growth outlook to between 1.5% and 3% from the previous 3% and 5%. 

Disappointed investors sent WPP shares down 7% in Friday trading on the London Exchange. 

Net Organic growth (which excludes M&A and currency impact) for the first half was 2% globally while North America decreased 1.2%. 

Reported net revenue for the first half totaled 5.8 billion GBP, up 5.5%. 

Media was a star performer for the company in the first half with organic growth across the first two quarters of 6.1%. Creative agencies as a group posted an organic decline of 2.3% for the second quarter and 0.8% for the first half.   

WPP CEO Mark Read stated, “Our performance in the first half has been resilient with Q2 growth accelerating in all regions except the USA, which was impacted in the second quarter by lower spending from technology clients and some delays in technology-related projects. This was felt primarily in our integrated creative agencies. China returned to growth in the second quarter albeit more slowly than expected. In the near term, we expect the pattern of activity in the first half to continue into the second half of the year.” 

Client spending in consumer packaged goods, financial services and healthcare remained good, said Reed, adding, “despite short-term challenges, our technology clients represent an important driver of long-term growth.” 

Net new business billings in the first half totaled $2 billion. 

Like other holding companies, WPP is investing deeply in artificial intelligence technologies and Reed said it was delivering work powered by AI for many clients including Nestlé, Nike and Mondelez. “AI will be fundamental to WPP’s future success and we are committed to embracing it to drive long-term growth and value.”