The world’s largest advertising conglomerate has shown the biggest sign yet that it’s feeling the pinch from disruption within the industry.
WPP issued a rather dour assessment of the business to shareholders yesterday, cutting its profit outlook and forecasting yet another year without any growth.
The bad news had serious repercussions, with WPP’s stock dropping as much as 15 per cent – a 19-year low for the company – which prompted a temporary trading halt.
In a presentation to analysts, WPP boss Martin Sorrell admitted the company was “embarrassed” by what happened in the last three quarters of the year, saying it was “over-optimistic”, according to Bloomberg.
However, rather than “moaning” about the outlook, Sorrell said the focus is firmly on WPP reacting to it.
Alex DeGroote, media analyst at Cenkos Securities, told Bloomberg: “There’s a real sense of shock and awe at what’s happened to his business model.
“This is a stark reminder of the significant challenges WPP faces.”
WPP’s stock price crash also had a knock-on effect on rival Publicis Groupe, which saw shares dive as much as 6.1 per cent.