Mark Read the boss of advertising network WPP that houses global advertising agencies including Ogilvy and Grey has indicated that he is not “naïve” about the impact of an impending recession on his business.
The group posted favourable results for the first half of the year with revenues up 10.2% to £6.75 billion. Operating profit also jumped 11.4% to £539 million and pre-tax profit was up 6.1% to £419 million in the six months to June.
It picked up new business wins including Audi, Audible, Danone and Nationwide during the period. Despite the positive results, WPP shares dipped by 6.5% in early trading.
Read said “No industry is immune from the impact of a recession, and the advertising and marketing industry is no different. Overall, there’s inevitably an impact and we’re not naïve about that.”
Yesterday the Bank of England (BoE) warned of a deep recession in the UK next year, after it hiked interest rates by 0.5% to combat runaway inflation, which it said could now reach 13%.
He added that the group was already engaged with its advertising and media buying clients to help them reach consumers in the UK and globally, to mitigate the impact of recessionary pressures, and that his goal was also to “look after” WPP employees and see as many jobs as possible were protected in the event of a severe economic downturn.
“We managed our way through Covid through a mix of natural attrition and other measures and we’ve got long-term savings opportunities in our business from our transformation programme, so I think we’re well placed to navigate the more challenging economic conditions and our goal would be to do everything we can to look after our people.”
“We are having a lot of conversations with clients about how they can manage the impact of inflation, how they can innovate, how they can demonstrate they’re on the side of the consumer,” he said.
Read added that advertisers had learnt from their positive actions during the coronavirus pandemic that “sustaining their investment is important to continue to build brands for the long term”.
“I don’t think one can advertise themselves out of recession, but I do think that innovation, telling consumers what you’re doing and demonstrating how you can help them is important,” he added.