WPP has reported growth of 3.2% in the third quarter with the company revealing there are growing client concerns on issues such as viewability and measurement.
Sir Martin Sorrell also highlighted how the first effects of the Brexit uncertainty in the UK and Europe on the group have started to emerge.
Overall revenue rose by 23.4% to £3.611bn (US$4.41bn) while revenue on a constant currently basis rose 7.6% based on the continuing weakness of the British pound “especially over the last quarter, following the United Kingdom vote to exit the European Union.”
Third quarter results for Asia Pacific, Latin America, Africa & Middle East and Central & Eastern Europe grew 3.2% on a like-for-like basis to £1.106b, with the region leading the company with the strongest reported growth.
WPP reported that in the first nine months of the year 38.5% of the group’s revenue came from direct, digital and interactive, up 1% on the previous year, while digital revenue was up 6% on a like for like basis.
However, it warned that there was increasing concern by clients on major issues such as viewability and measurement, among others.
“There does seem to be growing client concern around what one major client, in particular, calls ‘the three vees’ – value, viewability and verification – mainly in relation to on-line video,” WPP said.
“Another major client has raised questions about the distribution of on-line spending, if not the absolute level.
“There is also client concern with the unequal measurement standards between off-line and on-line media, heightened by independent research indicating higher levels of ‘bots’ viewing than measured by Google, and a mistake in viewing time statistics by Facebook.”
“We remain committed to the highest standards of clarity and transparency on media buying and leading the industry in developing more contemporary measurement standards in offline and digital media, which even some of our competitors now acknowledge.”
Overall it said the outlook for the remainder of the year and into 2017 was low growth and with a continuing focus on costs.
“Worldwide growth looks likely to remain tepid for the rest of 2016 and for 2017. There seems little likelihood of either an upside breakout or, indeed, a downside one, that is a recession,” it said.
“Although we are in the early stages of rolling out our three year planning process and are starting the 2017 budgeting process, we see no reason why revenue and net sales cannot continue to grow at over 3% in 2017, a very similar pattern to 2015 and 2016.”
