LONDON — Revenue from WPP’s PR division fell 5.5% on a reported basis and 3.3% on a like-for-like basis in the first quarter of 2024  to £276 million, according to the holding company’s latest trading update.

WPP said that BCW and Hill & Knowlton, which are merging in July to form Burson, had a combined drop in income due to the “loss of Pfizer assignments and the impact of macroeconomic uncertainty on client spending.” Strategic communications network FGS Global, however, “grew against a tough comparison”.

This follows growth of 2.4% for the PR division – which represents 10% of WPP's business – in the previous quarter, and overall growth for WPP’s PR agencies for the year of 1.4%.

Across WPP, like-for-like revenue dipped 1.6% to £2.7 billion with overall revenue down 5%. Growth in the UK and Western Continental Europe was offset by declines in North America and Asia Pacific, where strong growth in India was offset by a decline in China.

The group remained bullish, saying the creation of merged entities including Burson, plus GroupM and VML, were “on track to deliver targeted in-year savings and well-placed to benefit from a strong pipeline”. WPP also underlined progress on its significant AI investment; earlier this month WPP announced a generative AI collaboration with Google Cloud.

WPP chief executive Mark Read said: “The first quarter of 2024 was very much in line with our expectations with performance reflecting the toughest comparator of the year.

“Strategically, we have progressed well on the priorities set out at our Capital Markets Day at the end of January. We’ve rolled out multiple AI tools through our intelligent marketing operating system WPP Open, including the latest foundation models from Bria, Google and OpenAI, and at Google Cloud Next we launched our Performance Brain to predict the best-performing content ahead of campaigns going live.

"These products are being deployed at scale, together with investment in training for our people. WPP Open was also at the heart of our most recent new business successes, including major media wins with Nestlé.

“Structurally, VML is now well established and is on track to deliver savings. GroupM is progressing well with its simplification and Burson will be operational in July. I’m very pleased with the progress we are making and we are already seeing the benefits of a simpler and more agile structure for our clients.

“We remain on track to return to growth in the balance of the year, supported by an encouraging new business pipeline and the strength of our business creatively and in media, both powered by new AI capabilities, while our simpler structure will drive organisational flexibility and stronger cash conversion.”

Earlier this month, Burson’s leadership issued an internal memo warning BCW and H&K staffers of redundancies of duplicate roles across the global business as a result of the merger.