London: WPP Plc shares had their biggest drop in 17 years after the world’s largest advertising company cut its full-year revenue forecast amid lower spending by customers, in particular consumer-goods manufacturers. The stock fell as much as 12 per cent after WPP said like-for-like revenue growth is expected to be between zero and 1 per cent in 2017. That’s down from an earlier 2 per cent forecast. The stock fell as low as 1,396 pence and was down 8.4 per cent to 1,460 pence at 8:20am in London. Rival Publicis Groupe SA declined 2.1 per cent in Paris.
Advertising companies worldwide are being hit as their biggest clients — who face low global economic growth and technological disruption — increasingly focus on cost-cutting to preserve margins. London-based WPP singled out ad spending on consumer goods — items such as laundry detergent and toothpaste that make up about one-third of its revenue — as coming under particular pressure.
