Shares in global advertising group, WPP, toppled by 33.5% yesterday, after one of its key clients, the Ford motor company, announced plans to reduce non-production-related costs by 20%. This reduction will include, at least to some degree, expenditure on marketing and advertising.
Ford is understood to plough 80% of its advertising and marketing spend into the WPP network of agencies and was recently considering making WPP its sole agency, although this plan has now been abandoned.
The cost-cutting measures at Ford had already been put in place in 2001, but the new announcement to reduce non-production spend by 20% in two years represents an acceleration of this plan.
At close yesterday, WPP’s shares were down to 373p from 406.5p of the previous day. By mid-morning today, stock had fallen a further 1.3% to 368p.
Hello. We have downloaded cookies on your device. Some of these cookies are essential for the website to function. Others are non-essential and are used for analytics and advertising.
We need your consent for these types of cookies.
To withdraw your consent or change your cookie choices, please do this through your browser settings.
Otherwise, click OK to accept and continue.
