WPP Earnings: Cost-Cutting in Technology Sector Pressuring Ad Spending, but We Expect a Turnaround

While WPP posted organic growth in the first half, the results were disappointing due to the decline in ad spending by technology clients in the U.S. in the second quarter, the impact of the loss of the Walgreens account, and like its peers, the slowdown in spending on digital transformation. Lower spending in the technology, media, and telecom sector affected WPP more than its peers, given the firm’s higher exposure. For these reasons, the firm reduced its full-year organic growth guidance to 1.5%-3% from 3%-5%.