The actions of the WPP advertising giant plunged 18% as an economic uncertainty, the DIM forecasts of threat of AI
The actions of the advertising giant based in London WPP plunged 18% on Wednesday, stirring a broader anxiety about the state of advertising activity.
The action settled at $ 29.34, its lowest point since the start of COVID in 2020, after Terna quarterly results and the unexpected decline in the company’s profits. WPP has cited a combination of customer defections and economic tremors. The sector is faced with a significant disturbance due to AI, which can perform functions such as planning, purchase and creative execution to a fraction of traditional costs.
The volume of exchanges was almost eight times its average level, and the dive followed an equally poor day on the London Stock Exchange, where the shares touched a hollow of 16 years. In Wall Street, the actions of the other two major agencies negotiated in New York (Omnicom and Intepublic) each lost 3%. Last December, Omnicom announced its intention to acquire Intepublic, which would create the n ° 1 agency in the world and leave it, Publicis and WPP as three surviving majors.
The bad financial news and actions occurred several weeks after a WPP key, WPP Media, was suddenly dismissed by Paramount after two decades of work on its film studio campaigns and other projects. Coca-Cola also moved its North American media purchase activities to Publicis, which also took Mars from WPP.
CEO Mark Read, who said he would move before the end of the year, told analysts on a conference call that the reduced profit forecasts reflected the impact of several customer losses as well as economic uncertainty. WPP Media, until recently known as Groupm, faced “certain distractions to the company,” said Read. “The implementation of the new strategy for the WPP media is going well, but we clearly do not see that translates into better commercial performance.”
Evan Spiegel, CEO of Snap Inc., was questioned in a CNBC interview with the Allen & Co. conference in Sun Valley, ID on the fall in WPP actions and what it means for all advertising stakeholders. “It is difficult to speak specifically about WPP’s affairs,” he said, “but there is no doubt that it is an uncertain commercial environment.”
When Snap announced quarterly results last spring in the middle of the confusion on the deployment of President Trump’s price, he cited the “macro opposite winds” which struck his advertising activity. Investors have struck the company’s shares, which dropped 46% in the past year.
Certain sellers of large -scale digital announcements, for example Meta and YouTube, have managed to stay on a regular growth trajectory. The state of their companies and those of other stakeholders in the advertising industry will become clear in the coming weeks, as more and more media and technologies are publishing quarterly profits.
