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British advertising giant WPP is falling further behind its French rival Publicis as Donald Trump’s tariffs bite.
The London-listed company warned on Thursday it expects revenues to fall by as much as 2pc this year, following a 1pc decline in 2024.
Revenues slumped by more than a fifth in China in the final three months of the year, while the group also recorded falling sales in the UK and US.
Mark Read, the chief executive of WPP, said that while the re-election of Donald Trump as US president had helped to restore some business confidence, his threat of tariffs had created a “high degree of volatility”.
WPP, which owns agencies including Ogilvy and Wunderman Thompson, has been hit by a broad economic downturn as consumers and clients cut back spending.
However, its performance is lagging behind those of its rivals and the gloomy outlook will widen the gap between WPP and Publicis, the French advertising behemoth.
The Paris-based company leapfrogged WPP to become the world’s largest ad group by revenues last year and this month said it expects revenues to grow by up to 5pc in 2025.
In a further setback to the British company, US rivals Omnicom and Interpublic have struck a deal to combine in a $31bn (£24bn) mega-merger. The combined group will offer intense competition.
Shares in WPP crashed by as much as 20pc in early trading on Thursday, wiping £1.5bn off the company’s market value to take it below £7bn. It marks the biggest one-day share crash since 2018.
Mr Read said: “We are cautious about the macro environment and what we hear from clients so we are very cautious with our guidance for the year, particularly with some of the uncertainty that’s out there and pressures on consumer and corporate confidence.”
Under Mr Read, WPP has restructured its sprawling array of agencies into six networks. In August it struck a deal to sell its stake in PR giant FGS Global to private equity firm KKR for $775m.
The ad group is investing heavily in artificial intelligence (AI), with plans to pump £300m into the technology this year.
Mr Read has also ordered the company’s global workforce of 114,000 back to the office for at least four days a week in an effort to improve performance, a decision that sparked an internal backlash last month.
However, WPP’s decline is likely to raise questions about Mr Read’s future. The industry veteran took over as chief executive in 2018 following the acrimonious departure of founder Sir Martin Sorrell.
His position will be a key area of focus for Philip Jansen, the former BT boss who became chairman of WPP at the beginning of this year.