The phrase "return to form" is used so often on Madison Avenue that it has lost most of its meaning, but occasionally the numbers provide something close to the real thing.
WPP Media reported a 0.3 percent increase in like-for-like net sales during the third quarter, according to results released Thursday by its British parent company — a modest gain, to be sure, but the first positive number the media unit has posted in recent quarters. In the second quarter, the same operation declined 2.8 percent. (What a difference a decimal point makes.)
The improvement came even as WPP's overall business continued to struggle, with net sales declining 2.1 percent on a like-for-like basis. The company's creative operations, which account for 48 percent of net sales compared with 45 percent for media, fell 5.1 percent during the quarter, an acceleration from the 3.5 percent decline in the prior period.
WPP attributed the media unit's improvement to better spending trends among existing clients, contributions from new account wins and what the company delicately described as "easier year-over-year comparisons." Among the notable developments was the retention of the Coca-Cola Company's global media business, excluding North America, Japan and South Korea.
"We are on track to deliver phase one of Elevate28," said Cindy Rose, the WPP chief executive, referring to the holding company's transformation strategy, which has become something of an annual ritual in the industry.
At Stagwell, the picture was rather different. The holding company reported a 7.4 percent increase in organic net revenue, but its Media & Commerce segment — which accounts for approximately 18 percent of quarterly net revenue — declined 2.1 percent organically. The segment's adjusted EBITDA fell 19.5 percent year over year.
The contrast was especially stark when measured against Stagwell's Digital Transformation operations, which grew organic net revenue 23.1 percent, and its Marketing Cloud business, which surged 108.4 percent. Mark Penn, the Stagwell chairman and chief executive, described the quarter as the biggest in the company's history.
"Software products, like our agentic Stagwell Machines, and the Digital Transformation segment are driving our business," Mr. Penn said.
The results illustrate a familiar tension in the holding company business: the race to become a technology company often leaves the traditional media agency standing in the garage.
Original story published in MediaPost: "WPP Media Biz Returns To Growth, Stagwell's Declines Despite Holdco's Gains"