WPP (WPP)

WPP (WPP)

Postby winston » Sun Sep 09, 2018 8:52 am

not vested

Stocks to Buy: WPP (WPP)
Five-Day Loss: 11.5%

The ad business in North America isn’t what it used to be, and it’s not just because Mad Men no longer produces new episodes.

“Large multinational marketers (i.e. CPG) continue to shift dollars in-house and aggressively manage agency costs and fees,” Forrester principal analyst Jay Pattisall told Adweek recently.

“Omnicom, Publicis, MDC and WPP all reported declines or lackluster results citing their North American operations as areas of decline.”

WPP PLC (NYSE:WPP) reported Q2 2018 results Sept. 4. Like-for-like revenue was up in every geographic region except North America where it saw them fall 0.3% in the second quarter and 0.7% in the first six months of the year.

Not to worry.

WPP’s new CEO, Mark Reid, is undertaking a strategic review of its business to optimize its size and stature.

“We’re not trying to manage 400 different independent companies, so I’m not sure why we have to have 400 different independent brands,” Read said discussing WPPs future structure.

“We need enough brands to manage client conflict but not so many that it makes the business impenetrable to understand.”

Read wants to move from lower-margin execution services to higher-margin consultative ones.

At the end of the day, WPP is no different than a company like Procter & Gamble (NYSE:PG), in that it has too many brands that aren’t getting the investment and focus they deserve; as a result, it makes total sense to fold those brands into bigger ones such as J. Walter Thomson or Ogilvy.

Long-term, I like where Read is taking WPPs business.

Source: Investor Place
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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