Has WPP lost trust of many investors?

WPP which owns companies like Ogilvy& Mather, J Walker Thompson and Group M, had a steep share price fall, by more than 6 per cent in the wake of threat from new competitor like Accenture and the rise of Google and Facebook in advertising.

At the start of the year WPP had forecast flat margin growth but yesterday it was revealed a0.4 per cent fall in interim pre-tax profit margins to 13.3 per cent.

According to an analysis “ the company has lost trust of lot of investors. It’s perilous that a 40 basis point contraction in margin – which is almost worth £20m – can take down the future valuation of the company”.

Mr Mark Read, was formally appointed CEO of WPP, and his tenure at the top of the advertising group said the company is well positioned, despite the advances of tech giants and other new rivals from consultancy world.. He would like to reshape the company and perhaps merger some WPP companies and creation of more shared functions between its individual brands.

The largest packaged goods brands began cutting their spending with big ad holding companies such as WPP.

The fast involving ad landscape one where ad holding companies like WPP are increasingly under increasing pressure and scrutiny.

Sir Martin Sorrell left WPP I April after taking control of WPP for 33 years and launched his S4 capital with the backing of Jacob Rothschild chairman of RIT Capital Partners, recently aequired Media Monks a Dutch-based digital production company for €300m.