WPP profits hit as big data bites

WPP has admitted that the rise of big data is having a negative effect on its profits after revealing its so-called “data investment management unit” has struggled to match the UK growth rates across the rest of the business.
The firm said the performance of the UK data division, made up of companies such as KBM Group, GroupM, Kantar and WPP Digital, was “difficult”, with operating margins improving just 0.3 points to 10.3%. It attributed the relatively poor performance to companies using their own data, as opposed to being reliant on third-party information.
Elsewhere it recorded a strong performance in its UK direct, digital and interactive agencies, with the group’s revenue totalling £1.41bn in 2013, up 10.9% year on year. On a like-for-like basis revenue increased by 4.8% in the UK.
WPP – head up by Sir Martin Sorrell (pictured) – said that clients were “understandably continuing to demand more for less” and “consolidating competitors [are] discounting their pricing heavily, particularly in media investment management”.
It said overall group revenues rose 6.2 per cent to £11bn in 2013, with a third of that growth coming from acquisitions. On a like-for-like basis, which excludes acquisitions and currency movements, revenues were up 3.5 per cent – in line with consensus analyst expectations.

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