WPP said its revenue slump in Q3 improved by almost half compared with the worst of the coronavirus lockdown in Q2.
The world’s biggest agency group said revenues less pass-through costs, WPP’s preferred measure, fell 7.6% on a like-for-like basis.
When the impact of currency differences, acquisitions and disposals are included, revenues less pass-through costs fell 11.9% to $3.1 billion.
WPP said “all regions and business segments witnessed an improving trend” in the third quarter compared with the second quarter and it pointed to “momentum” in new business, most recently retaining Walgreens Boots Alliance’s global integrated account.
But by region, Asia-Pacific continued to be a weak spot, with revenues in two of WPP's top five markets, China & India, falling 16.7% and 16.3% respectively. In contrast, North America was down 5.1%, the UK 6.5%, Western Europe 5.5% and the rest of the world, including Asia Pacific, 12.5%.
Among WPP divisions Group M and VMLY&R were among the bright spots in third quarter.
“VMLY&R continued to be the best-performing global agency, and was down only slightly year on year, while Group M recovered strongly as client media expenditure picked up,” WPP said.
Group M, the media division that includes Essence, MediaCom, Mindshare and Wavemaker, had suffered more than the creative agencies in Q2, when WPP’s revenues plunged 15.1%.
The “other integrated agencies”, which include Grey, Ogilvy and Wunderman Thompson, were slower to improve and “recovered steadily”.
Public relations was the best-performing part of WPP, and specialist agencies were the worst, partly because of cuts to events and travel clients.
WPP said it “continued to exercise tight cost control, despite the recovery in activity compared to the second quarter, with all of the decline in revenue less pass-through costs mitigated through cost savings during the third quarter”.
A handful of divisions increased revenues by region in Q3, including VMLY&R in the US and Group M in the UK.
Mark Read, chief executive of WPP, said: “Given the tightening of Covid restrictions around the world and uncertainty in the global economic outlook, we remain cautious about the pace of recovery.
“It is important that we maintain our strong financial position and we are on track to achieve cost savings towards the upper end of our £700-800m ($908m-$1.04bn) target.”
But Read told Campaign "we certainly haven’t seen any major changes in advertiser spending or sentiment in the last month" despite worries about a new wave of Covid infections.
This article was edited from its original edition in Campaign UK with added results from Asia-Pacific.