Diana Marszalek 11 Mar 2021 // 9:53PM GMT
LONDON — WPP’s PR agencies were the holding company's top performing group for 2020, even as the unit's revenue dropped 4% compared to 2019.
The company’s Q4 earnings report shows the PR firms — which include BCW, Hill+Knowlton Strategies and newly-merged Finsbury Glover Hering — recorded a 4.1% drop in revenue for the fourth quarter of the year. All figures reflect like-for-like revenue less pass-through costs.
That was a steeper decline than the group experienced in Q3, when the group’s revenue dipped 2.9%, but was an improvement over Q2, when the group's revenue fell 7.5% in conjunction with the widespread Covid-19 shutdown. The earnings reported noted that BCW in particular is recovering well, and that the group continues to benefit from Covid-related business.
WPP said its biggest PR agency, BCW, "continued to improve" and was one of the best performers in the UK in Q4, along with growth in North America. However, H+K Strategies and specialist PR firms were weaker in Q4.
WPP also said that the Finsbury Glover Hering merger "has achieved strong traction both with clients and in attracting new talent".
The group's PR firms fared better in Q4 than its other divisions. Global integrated agency revenue fell by 6.3% on a like-for-like basis during the quarter, and 7.9% during the year as a whole. Specialist agency revenue was down 8.6% in Q4 and 11.5% for the year. Business for WPP as a whole was down 6.5% in Q4 and 8.2% during 2020.
The report comes on the heels of a year during which WPP took 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.
CEO Mark Read said: “2020 was a tough year for everyone, including our people who faced the personal and professional challenges of Covid-19. Their commitment to our clients, support for one another and contribution to the communities we serve have been a constant source of inspiration and pride.
“WPP’s performance has been remarkably resilient, thanks to these efforts and the demonstrable value of what we do for our clients. While revenue was significantly impacted as clients reduced spending, our performance exceeded our own expectations and those of the market throughout the year. There is no doubt that the actions we took during the previous two years to transform and simplify the business and reduce debt – to a 16-year low at the end of 2020 – played a crucial role in the strength of our response.
“At the height of the pandemic we saw five years’ worth of innovation in five weeks, with a dramatic shift to digital media and e-commerce as people’s lives went online – trends on which we based our vision for WPP. Having modernised our client offer, refined our structure and strengthened our agency brands, we were well prepared for this shift and saw the benefits of this acceleration in parts of our business.
'Our strategic progress was also evident in our very strong new business performance, with key wins including Alibaba, HSBC, Intel, Uber and Unilever.
“In December 2020, we outlined our plans to continue to transform our business, to accelerate our growth and to put purpose at the heart of what we do. We see many areas of attractive growth for WPP, from the permanent shift to e-commerce, the digitisation of media and the need from our clients to convert brand purpose into action.
"The past 12 months have demonstrated the importance and impact of communications. The demand from clients for simple, integrated solutions that combine outstanding creativity with sophisticated data and technology capability is only set to grow and, while uncertainties remain around the impact of the vaccine roll-out and economic growth, we continue to expect 2021 to be a year of solid recovery.”