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According to WPP boss Reid, advertisers have returned to Elon Musk’s X within months of the election. He said that London-listed ad groups are working with social media platforms to win more brand spending.
WPP stocks fell to their four-year lows on Thursday after warning that core revenues and profit margins would flatten this year due to high uncertainty in core markets such as the US and the UK.
WPP CEO Reid said there are concerns among clients about the impact of Donald Trump in the White House and the risks of a trade war between companies in sectors such as the automotive market.
He said that as a result, concerns about inflationary pressures are also more widely concerned.
He told the Financial Times: “Our clients are worried about tariffs. There is a certain degree of optimism about deregulation, and the impact of the US economy (but) consumers, especially in the US, is concerned about inflation. So of course we are worried. We need to prepare for a rather tough year.”
Reading said the US has “a lot of challenges for many clients.” “They are really waiting to see what actually happens, and as you know, business doesn’t like uncertainty.”
However, he said X, owned by Trump Ally Musk, has seen a surge in advertising since the election. Other advertising executives told FT that the brand knows the power Musk currently has in the White House, but he declined to comment on why this is.
“We certainly saw more clients returning to the platform over the past few months,” Reed said. “We’re talking about how (x) supportive of delivering the message that advertising is safer (it’s time to go back to the platform.”
Last year, X filed a federal antitrust lawsuit denounced the World Federation of Advertisers and several large brands coordinating X’s illegal boycott.
Read on: “Usage is definitely rising. Looking at the impact it has on global politics, I have to say it’s strong. For some clients, I think it’s a good place.”
The UK says that Labour’s first budget in November reached discretionary project spending among UK clients, and once again focuses on some of the businesses focused on more projects.
He said the investment decision was delayed. “Many companies are putting pressure on costs because of the increase (and) it definitely affects their willingness to spend. In the short term, they weigh a portion of their business.”
On Thursday, WPP shares fell more than 16% after reporting a decline in annual organic revenues that was worse than analysts had predicted, down more than 1% due to weaker client spending in the home market, North America and China.
Last year, WPP lost its position as the world’s largest advertising agency due to revenues to French rival Publicis, but two largest US rivals, Omnicom and IPG, announced plans to merge to create a single, larger group.
Revenue was £14.7 billion in 2024, down 0.7% from £14.8 billion in 2023, but increased 2.3% on a similar basis. Core revenues reduced the reporting 4.2% and 1% on a similar basis.
WPP’s operating profit fell 2.5% to £1.7 billion, but was up 2% on a similar basis. The company reported an operating profit margin of 15%, increasing points by 0.4% on a similar basis.
The company expects similar low-revenue pass-through costs (fees paid to external suppliers) to be between flat and 2%. Analysts were hoping for an increase. Heading operational margins are expected to remain flat.
The group has pledged to spend more and more on AI-focused technology than this year to help create better, targeted marketing campaigns.
