WPP rounds out resilient growth picture for holding companies

WPP rounds out resilient growth picture for holding companies
WPP CEO Mark Read

WPP reported solid mid-single-digit like-for-like revenue growth for fiscal year 2022, rounding out a resilient earnings season for major media-buying holding companies. It does mark a slowdown in growth, however, as the company, like its competitors, reported double-digit growth in fiscal year 2021.

The British company detailed that its media investment and intelligence arm, GroupM, provided a boost in growth, seeing 9.1% like-for-like revenue less pass-through costs.

In all, WPP’s 6.9% like-for-like revenue growth less pass-through costs for 2022 was comparable to organic growth figures for Omnicom Group (+7.2%), and IPG (+7.0%). Publicis Groupe, meanwhile, saw impressive double-digit organic revenue growth in 2022 (+10.1%) while Dentsu had comparatively slower, but still fairly robust growth (+4.1%).

French mass media company Vivendi, which holds Havas Media, is expected to report its fiscal year 2022 earnings early next month.


Such growth comes despite the challenges faced by businesses in 2022 amid rising inflation. The results suggest that major businesses continued advertising through the downturn, likely due in part to ongoing positive performance among media buyers. Many large consumer staples saw similar single-digit to low-double-digit organic growth in Q4 2022, such as Proctor & Gamble (+5%), L’Oréal (+8%), Unilever (+9%), PepsiCo (+15%), and Mondelez (+15%).

A two-speed downturn

WPP CEO Mark Read said that the holding company “enter[s] 2023 in a strong financial position with good momentum from new business and the many opportunities ahead of us.

“While there will no doubt be challenges, the continued need for major companies to build brands, sell products, reinvent and transform their business, understand their data, invest in technology and exploit the potential of AI remains, as does their need for modern partners who can help them navigate this new world.”

China exposure

China’s zero-Covid policy through much of 2022 impacted the country’s advertising industry and broader economy. Given China is the second-largest advertising market in the world after the US, overexposure to the country could provide a drag on global ad revenues.

In its earnings report, Dentsu specifically mentioned the continuation of Covid-related policies in China impacting revenue performance and client spend in H2 2022.

Excluding Japan, Dentsu reported 2.5% growth in the Asia Pacific (APAC) region for 2022, with more than 20% full-year growth in India.

In the North Asia cluster, Dentsu said Taiwan “performed well” delivering 10% growth. While in Japan, the agency group reported full-year 2022 growth of 0.4%.

WPP was the only holdco that separated out revenue from China, reporting like-for-like revenue less pass-through costs were down by -8.4%.

Omnicom and Publicis Groupe reported full-year revenue growth in APAC, with each agency group registered 6.9% and 6.5% growth in this area respectively.

IPG did not split out regional performance in its earnings, but its CEO Philippe Krakowsky clarified that there was “growth in every world region and broadly across client sectors”.

Looking ahead to 2023

All of the holding groups that have reported so far have mentioned the macroeconomic outlook, uncertainty or challenges when forecasting growth between 2% and 5% for 2023.

WPP’s 2023 guidance was 3% to 5% like-for-like revenue less pass-through costs.

Meanwhile, IPG forecast its organic net revenue growth between 2% and 4%, Publicis expects to “sustain the momentum” built since the pandemic by delivering 3% to 5% organic growth, and Dentsu estimated organic growth of 4% for the group this year.

Omnicom is targeting revenue growth for 2023 of between 3% and 5%, but was more openly cautious than other holding companies in its optimism. Though chairman and CEO John Wren boasted of an “outstanding” 2022 and a “high level of confidence” in Omnicom’s strategic and and financial position during the company’s earnings call earlier this month, he cautioned that the company remains vigilant of and prepared to tackle potential issues related to macroeconomic and geopolitical factors such as the war in Ukraine and the “economic risk posed by rising interest rates and higher inflation”.

Overall, however, the holding companies’ forward guidance is in line with the broadly optimistic tone of the IPA’s recent Bellwether report which found total marketing budgets were upwardly revised last quarter to 2.2%, with particular growth in main media marketing (4.4%), driven by video (+13.7%)  and other online (+6.9%).

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