Wed, 26 Aug 2015 17:03:00 GMT
With whatever the hell is going on with the Chinese economy, Banksy’s ‘Dismaland’ and the perma-cloud of rain lingering over LBB’s HQ, it’s clear that this week the over-arching theme of the week has been ‘depression’. Unless, that is, you’re Sir Martin Sorrell. In which case, you’ll have reason to be cheerful. Over 23 billion reasons, in fact, according to WPP’s 2015 interim report that shows that overall billings for the advertising behemoth are up 5 per cent. Assuming, that is, that Sir Martin doesn’t subscribe to the Notorious B.I.G’s philosophy that ‘mo money mo problems’.
We’re pretty sure he doesn’t. Judging by the report, it’s more like ‘mo money some problems on a geopolitical level’.
Going by the headline results, one can easily imagine smiles all round at WPP HQ: profits in the first half of the year are up; share prices are up; the holding company is well on course to hit its 2015 targets. But read a little further and look beyond WPP’s fortunes to the world at large and the (imagined) emotional state becomes somewhat more… complex.
Although markets like France, Turkey, Austria and Belgium in Western Europe and Russia, Poland and the Czech Republic in Central & Eastern Europe were singled out for their below par performance, the overall picture looks pretty healthy. The advertising and marketing sector of the portfolio is performing well over all, so you creative underlings can all breathe now. The WPP party line on China’s stock market drop appears to be ‘DON’T PANIC’ (feel free to take that as a Hitchhiker’s Guide to the Galaxy reference or a Dad’s Army reference, whichever works best for you). ‘Unabashed bulls’ is the precise phrase used in relation to both China and Brazil’s economic slowdowns.
With slowing growth in Brazil, China, and Russia (still faster than Western Europe and North America but not quite the Miracle-Gro bag of yesteryear) , India was the only BRIC nation to emerge from the report with strong results. Anyway, who needs BRIC when you’ve got the ‘Next 11’ (no, not a superhero football team from the future, but a set of countries, including Vietnam, South Korea, Iran and Egypt and Turkey, pegged to explode with opportunity in the 21st century) and other countries like Colombia and Peru and possibly even Cuba emerging as fertile ground for growth?
But despite the positivity, the report also urges caution as it discusses the unsteady geopolitical climate and Sir Martin’s beloved ‘grey swans’ (certain uncertainties) and risk averse, cost-obsessed clients. After all that good news about WPP’s results, the overall tone of the report’s outlook section is one of cognitive dissonance:
“To survive in the advertising and marketing services sector, you have to remain positive, indeed optimistic, seeing the glass half-full and industry and company reports generally continue, understandably, to reflect that attitude. However, general client behaviour does not reflect that state of mind as tepid GDP growth, low or no inflation and consequent lack of pricing power encourage a focus on cutting costs to reach profit targets, rather than revenue growth.”
Financials aside the report is more about the state of the world than WPP and so is well worth a read through whether you work for the holding company or not. There's lots to consider as it's both a global picture and an interesting collection of local spotlights.
‘Keep smiling and stay positive but don’t forget everything could go to shit quite easily’ is the read-between-the-lines message and that conflict between the need to be positive whilst having a realistic view of the negatives and challenges ahead is even acknowledged in the ‘Outlook’ sub-heading; Parallel Worlds.
Perhaps WPP have taken a cheeky staff outing to Dismaland? Banksy’s dystopian ‘bemusement park’ on the Somerset coast undercuts infantilised fun with grotesquery and gloom to poke fun at and highlight the folly of commercialism – something I’m sure Sir Martin could do with much more insight and incisiveness than Banksy, were he to decide to swap the spreadsheets for a graffiti spray can. (I’m also sure that if one of WPP’s agencies had stepped in to create Banksy’s ‘TV ad’ it might have been genuinely funny and scathing rather than blunt and obvious… but that’s another discussion entirely.) While coming from opposing extremes of the economic and political spectrums, both the report and the art show draw attention to the weird juxtaposition of delusional positivity and murky reality that is modern life.
Then again... well, no one knows what Banksy looks like... could it be...?