WPP: Big tech scoffs Sorrell’s lunch

WPP’s stock slumped after the firm cut its long-term growth targets. It’s another sign that the advertising industry faces structural headwinds. Alice Gråhns reports.

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Martin Sorrell: 2017 was "not a pretty year" for WPP
(Image credit: © 2017 Bloomberg Finance LP)

"For a company that helps others to communicate their message, WPP has been remarkably bad at doing that for itself," says Alex Webb on Bloomberg Gadfly. Shares in the world's biggest advertising agency plunged 15% last week, their worst fall in almost 20 years, after CEO Martin Sorrell admitted that 2017 had not been "a pretty year" and made major cuts to his long-term growth targets. The group's new long-term earnings-per-share growth target is 5%-10% a year; only a few months ago, the range was still 10%-15%. As for 2018, like-for-like sales are set to be flat, and there seems scant scope for margins to rise.

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Alice grew up in Stockholm and studied at the University of the Arts London, where she gained a first-class BA in Journalism. She has written for several publications in Stockholm and London, and joined MoneyWeek in 2017.