Hasta La Creative!

Battling a slowdown in client spending, the world’s largest communications group cut its 2017 growth expectations to zero Tuesday, two months after an earlier downgrade. WPP started the year predicting up to 2 percent growth in net sales, before cutting its forecast to 1 percent in August, and then slashing it again today. Margins are also expected to be flat this year.

On the call, executives discussed the group’s 1.1 percent fall in like-for-like net sales, its main trading measurement, to $4.1 billion for the third quarter of the year. WPP CEO Martin Sorrell talked about the slow conditions that make 2017 “a different kettle of fish” from recent years.

“It’s not Facebook and Google; it’s not consulting; it’s the distortion caused by low interest rates” which has led to low growth, low inflation and limited pricing power, he said, speaking from New York to investors at WPP’s third quarter results presentation in London. “You can’t cut your way to prosperity. At some point you’re going to have to invest … otherwise you get a downward spiral in terms of volumes getting lower and lower.”

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