WPP Stock Plummets As Ford Looks To Cut Marketing Spend
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 ahares were down to 373p from 406.5p of the previous day. By mid-morning today, stock had fallen a further 1.3% to 368p.
