Dive Brief:
- WPP reported full year like-for-like revenue increased 13.3% percent in 2021, per its latest earnings report. The agency holding company’s creative agencies were up 7.7% in the year, executives said during an earnings call.
- Growth areas of experience, commerce and technology provided around 38% of revenue less pass-through costs — compared to 35% in 2019 — at its global integrated agencies. GroupM, which saw like-for-like revenue less pass-through costs increase 16.1% and a 41% lift in commerce media.
- WPP had its fastest organic growth in over 20 years and hit its 2023 revenue target two years early as agency holding companies continue to benefit from a better-than-expected ad market rebound.
Dive Insight:
Like its peers in the “Big Four” of agency holding companies, WPP posted a strong 2021 as it benefited from the rising tides of a recovering ad market. The batch of strong results is the latest sign that these conglomerates are, for now, moving away from the contraction that defined the sector before the pandemic and in its early days. WPP saw strong demand for digital marketing, media, e-commerce and technology, leading to its fastest organic growth in more than two decades, CEO Mark Read explained on an earnings call.
“As clients seek to accelerate their growth and transform how they reach customers, the depth, breadth and global scale of our offer — which combines creativity with technology and data, through Choreograph, and the largest global media platform in GroupM — is proving its value for existing and new clients,” the executive said in a statement.
WPP saw total net new business of $8.7 billion in 2021, as it expanded its work with Google, won Unilever’s media review and was named Coca-Cola’s global marketing network partner after a massive agency review. The global scale of large ad holding companies like WPP have made them attractive to major marketers looking for scale.
Overall, experience, commerce and technology drove growth at its integrated agencies as marketers continue to adapt their marketing to engage with changing consumers and shrink the sales funnel. GroupM, which is now 43% digital, found success as clients look to work with fewer agency partners by integrating creative, media and data. Specialty products Finecast and Xaxis also saw strong growth, with Choreograph now available in 10 markets after being introduced in 2021.
As M&A in the agency space surged, WPP made several moves in 2021, acquiring software engineering firm DTI in Brazil, AI solution provider Satalia, design business Made Thought and e-commerce provider Cloud Commerce. WPP on Feb. 22 acquired influencer marketing agency Village Marketing, and the company expects to make more acquisitions around digital marketing, technology, data and e-commerce in 2022, per the earnings call.