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Advertisers have returned to Elon Musk’s X in the months since the election, according to WPP boss Mark Read, who said the London-listed advertising group was now working with the social media platform to win more brand spending.
Shares in WPP dropped to a four-year low on Thursday after it warned that core revenues and profit margins would be flat at best this year given greater uncertainty in core markets such as the US and UK.
Read, chief executive of WPP, said there were concerns among clients over the impact of Donald Trump in the White House and risks of a trade war among companies in sectors such as the automotive market.
He said there were also worries over inflationary pressures more broadly as a result.
He told the Financial Times: “Our clients are concerned about tariffs. There’s a sort of degree of optimism around deregulation and the impact on the US economy [but] consumers, particularly in the US, are concerned about inflation. So we’re naturally concerned. We need to be prepared for a somewhat tougher year.”
Read said there were “a lot of challenges for many of our clients” in the US. “They’re really waiting to see what actually happens. And you know, business does not like uncertainty.”
However, he said that X, which is owned by Trump ally Musk, had seen a surge in advertising since the election. He declined to comment on why this might be, although other advertising executives have told the FT that brands were aware of the power that Musk now has in the White House.
“We certainly saw more clients coming back to the platform in the past few months,” said Read. “We’re talking about how we can support [X] in getting their message across that it’s safer to advertise, [that] it’s the time to come back to the platform.”
Last year, X filed a federal antitrust lawsuit accusing the World Federation of Advertisers and some large brands of co-ordinating an illegal boycott of X.
Read said: “The usage is definitely up and if you look at the impact that it has on world politics, you have to say it’s powerful. I think for some clients it’s a good place to be.”
In the UK, Read said that Labour’s first budget in November had hit discretionary project spending among British clients, again weighing on some of its more project-focused businesses.
He said that decisions over investments had been delayed. “A number of businesses have pressure on cost because of tax increases [and] that no doubt impacts willingness to spend. In the short term that weighs on parts of the business.”
On Tuesday, WPP shares dropped more than 16 per cent after it reported an almost 1 per cent decline in full-year organic revenue, worse than analysts had predicted, owing to weaker client spending in its home market, North America and China.
Last year, WPP lost its position as the world’s largest ad agency by revenues to French rival Publicis, while its two largest US rivals — Omnicom and IPG — have announced plans to merge to create a single, larger group.
Revenue was £14.7bn in 2024, down 0.7 per cent from £14.8bn in 2023, but up 2.3 per cent on a like-for-like basis. Core revenues saw a decline of 4.2 per cent on a reported basis and 1 per cent on a like-for-like basis.
WPP’s operating profits fell 2.5 per cent to £1.7bn but were 2 per cent higher on a like-for-like basis. The company reported a 15 per cent operating margin, up 0.4 per cent points on a like-for-like basis.
The company expects like-for-like revenue less pass-through costs (fees paid to external suppliers) to be between flat and down 2 per cent. Analysts had expected a rise. Headline operating margin is expected to remain flat.
The group has committed to cost-cutting measures and to spend more this year on AI-focused technology to help create better and more targeted marketing campaigns.
