Diana Marszalek 28 Aug 2020 // 2:58AM GMT
LONDON —WPP’s PR agencies have been the holding groups’s top performing group so far this year, despite a 7.5% drop in revenue in the second quarter.
The company’s half-year and Q2 earnings report, released Thursday, show the PR firms — which include BCW, Hill+Knowlton Strategies and newly-merged Finsbury Glover Hering — recorded £426m in like-for-like revenue during the first six months of 2020, down 4.5% from the first half of 2019. H+K Strategies has been the year’s best-performing PR agency, WPP said.
In Q2, the PR group’s revenue was £214m on a like-for-like basis, reflecting the 7.5% decline that coincided with the widespread Covid-19 shutdown. Q1 saw PR revenue down by 1.4% on a like-for-like basis to £223 million, with a bigger decline of 4.4% in March as Covid-19 hit.
The PR firms, however, have fared better this year than WPP’s other divisions. Global integrated agency revenue fell by 9.5% on a like-for-like basis during the first half of the year, with a drop of 15.7% in Q2. Specialist agencies revenue was down 11.8% at the six-month mark, having dropped 16.3% during the second quarter. Business was down 9.5% across WPP in the first half of the year.
Said CEO Mark Read: “After two months in which our strategic progress could be measured by growth outside Greater China, the second quarter saw an inevitable downturn, with like-for-like revenue less pass-through costs declining by 15%, albeit better than our expectations. Assuming there is no second wave nor major lockdowns, the second quarter is expected to be the toughest period of the year, although we remain cautious on the speed of recovery.”
Q2 saw WPP taking a number of steps to mitigate the impact of Covid-19 on the business, including a hire freeze, reviewing freelance spend, postponing pay rises and stopping discretionary costs. It also put additional measures in place, including voluntary salary sacrifice (more than 3,000 people on higher salaries have taken cuts of up to 20% for three months) and reduced hours.
“Our strategic transformation remains on track but as Covid-19 accelerates the change in our sector, we are accelerating our plans. We continue to attract new talent, invest in technology and ecommerce, and train our people in the skills they need for the future, with more than 20,000 receiving accreditations from Adobe, Amazon, Facebook, Google and Salesforce this year.
“We are working with our clients to help them get back to business, adapt their marketing strategies at speed and reshape their operations for a new world. Brands are seeing increases in online sales of 100% and more, and we are supporting eight of our top ten clients on ecommerce strategies. Our new business record is industry-leading, at $4 billion in the first half, including wins from Intel, HSBC and Unilever, and our pipeline remains strong,” Read said.
“I would like to thank our people around the world, the vast majority of whom have been working from home and have shown great creativity, agility and collective spirit to support our clients in challenging times.”