WPP reveals astonishing 30% monthly revenue fall in first region hit by global pandemic

The global impact of the COVID crisis has been laid bare in a market update from the world’s biggest marketing holding company WPP.

The quarterly update – covering the beginning of the year until the end of March – is the most detailed one setting out the disastrous economic impact of the pandemic for the media and marketing industry.

WPP revealed that during March, revenues for Greater China, the first geographic area to be hit by the coronavirus shutdowns, fell by 29.9%.

Much of the global economic disruption has come since the quarter closed.

Despite this, reported WPP revenues for the quarter were down by 9% in Asia Pacific, Latin America, Africa and the Middle East; down by 4.7% in the UK; down by 5.3% in western Europe; and down by 1.6% in North America. Overall reported revenues were down by 18.5%, although this number was also skewed downwards by the part sale of research house Kantar since last year

Australian and New Zealand revenues are not directly captured in the data because WPP AUNZ is separately listed on the ASX, although WPP plc is the majority shareholder. In WPP AUNZ’s last update to the market a month ago, it said it was too early to state the local impact of the lockdowns.

Read: A decade of innovation in weeks

Mark Read, CEO of WPP, revealed that more than 100,000 of the company’s staff, or 95% of its workforce globally,  are now working from home.

The company has already done more than $1.3b in cost cutting.

Read said: “We have witnessed a decade’s innovation in a few short weeks, with the way people meet, shop, work and learn increasingly reliant on technology.

“We are seeing clients rapidly shift emphasis and budget into digital media and direct-to-consumer channels and continue marketing technology investments.

“And, while many clients are significantly impacted by a reduction in consumer demand, other sectors such as packaged goods, technology and food retail brands have been more resilient. As in previous downturns, those who are most prepared and most far-sighted will be at an advantage when we come through the current situation.”

WPP also revealed that 20% of the pitches it had been working on have been put on hold. It said in the update:

“The current situation is unprecedented and the immediate future highly uncertain. There are some positive signs. In the past week, we have started to prepare for the reopening of our offices as and when governments begin to lift lockdowns – at substantially lower capacity and with enhanced safety measures in line with official guidance. Clients are also looking ahead.

“Visibility of a return to normal remains low.

“We expect the impact of COVID-19 on our business to increase in the short term, but it is not possible to quantify the depth or duration of the impact.”