Shares in WPP Group slid on Wednesday following reports that Ford Motor Company – the agency group’s biggest client – is keen to reduce its ad costs.
WPP stock fell 4% by yesterday afternoon to 680p, though the ad giant insisted it had known about Ford’s proposed review of its agency payment system for two years.
The auto titan accounts for around 6%–8% of WPP’s business, with global advertising divided between Ogilvy & Mather and Young & Rubicam, and media duties in the hands of MindShare.
Despite yesterday’s fall in value, WPP can draw some solace from an announcement by JP Morgan that it is rating the group as a “core media holding” and setting a target for its stock of 795p.
Said the investment bank: “[WPP] is a pure play on expanding marketing budgets globally, which we believe should show signs of improvement in the second half of 2002.”
News source: BrandRepublic (UK)