WPP Group on Wednesday shrugged-off concerns that cost cutting at its largest client, Ford Motor Company, would impact adversely on its earnings. According to a WPP insider, Ford’s planned cuts were old news of which the agency holding company had been aware for some time.
Investors clearly thought likewise with WPP shares on the London Stock Exchange dipping during the day to a low of £3.66 ($5.73; €5.31) before recovering to close at £3.775.
Ford announced earlier this week it plans to make cuts of up to 20% in marketing spend – although it stressed this did not equate to a proportionate cut in advertising expenditure. The cuts are part of a wider plan to trim up to $8 billion in non-production costs over the next two years.
According to a Ford spokesperson, the main casualties of the fiscal surgery would be sponsorship events, customer magazines and “dealer ride and drive” model launches.
WPP currently handles some 80% of all Ford marketing and advertising business worldwide, representing seven to eight per cent of the group’s total billings.
Data sourced from: Multiple origins; additional content by WARC staff