WPP reported third quarter revenues of $4.7 billion in 2016, with organic revenue growth (excluding acquisitions) of 3.2%. In North American, like-for-like revenues were up 2.6%, making the third quarter stronger than the second, thanks to the performance of advertising and media investment management, public relations, public affairs and branding and identity.
U.K. revenues have already been hit by Brexit uncertainty, with growth reaching just 2.1% in the third quarter, compared to 3.4% for the first nine months. Speaking at a presentation to analysts, Mr. Sorrell said, "Q3 reflected Brexit. Every client we talk to with heavy U.K. exposure, almost without exception, has Brexit and uncertainty as its first item."
Western Continental European like-for-like revenues at WPP – whose networks include JWT, Grey, Ogilvy & Mather, Mindshare and MediaCom – were up 5.4%, while Asia Pacific, Latin America, Africa and the Middle East, and Central and Eastern Europe grew 3.2%.
Mr. Sorrell suggested that AT&T's bid for Time Warner could be seen as a big opportunity for better targeting of advertising, particularly addressable TV advertising. He then went on to add, "We will be announcing an interesting joint venture with two other companies bigger than ourselves in short order on addressable TV, so there's a big opportunity there."
Asked about next week's presidential election, Mr. Sorrell replied, "Whoever wins is going to be faced with a highly divided nation. Trump didn't get to where he is now without vocal and vociferous backing from a significant portion of the electorate … Obviously he has a very strong constituency whatever you think about what he says and does. Having said that, there are checks and balances in the U.S. congressional system … the big issue is that we will be faced with more gridlock – whoever wins – over the next four years."
On the ongoing issues around media auditing, Mr. Sorrell commented, "There is increasing attention to audits. The issue is not a U.S. issue … I don't want to say 'I told you so,' but I do want to say 'I told you so.' We said that there are no rebate issues in the U.S. If you want to deal with problems, work with us to do something about Japan and the Middle East where there is even less transparency."
"We are looking in the wrong places. All the audit activity in the U.S. – however significant its size – is misplaced. It doesn't mean there shouldn't be standards – sure there should be – but it's no good pushing on the open door; you have to push on the closed doors."
He also talked about the rise of Amazon penetrating a number of categories, singling out diapers in the U.S. He joked, "As a putative father I'm very interested in the diaper industry." Mr. Sorrell, who has three adult sons from his first marriage, is expecting a child in November with his second wife, Cristiana Falcone.