WPP, the world's biggest advertising group, has downgraded its full-year growth forecast.
Its chief executive said today that a decline in marketing by major US tech companies had taken the company by surprise and left the outlook unclear.
Shares in the UK group fell over 7% after it reduced its forecast for growth in full-year like-for-like revenue less pass-through costs to 1.5-3% from 3-5%.
Chief executive Mark Read said lower spending by technology clients and delays in tech-related projects had caused the U.S market to fall in the second quarter, offsetting accelerating growth in other regions, including China.
"What happened in the second quarter took us a little bit by surprise, I'd say, as the quarter went on," he said in an interview today/
"Tech clients' spend will pick up after a period of time, but I think we are nervous for the rest of the year because we can't get total clarity on when that's going to happen," he said.
The tech sector in turn is wrestling with clients' reduced willingness to spend.
Apple last night forecast a sales slump would continue into the current quarter, sending its shares lower after it predicted what could be the fourth quarter of declining sales.
WPP rival Interpublic also lowered its annual growth forecast last month after it posted a fall in quarterly revenue similarly blamed on tech clients cutting marketing budgets.
WPP's Read said consumer goods companies continued to spend, and categories such as leisure and financial services were strong.
The group reported a 2% rise in like-for-like revenue less pass-through costs to £5.81 billion in the first half of the year.
Brands are taking a "wait and see" approach to advertising on social media platform X, the new name for Twitter, until they can understand where owner Elon Musk is taking the company, the CEO of WPP said today.
Musk unveiled the new name and logo last month, signifying his focus on building an "everything app" with services beyond social media, such as peer-to-peer payments.
The social media firm has endured months of chaos, including thousands of layoffs, criticism over lax content moderation, and an exodus of advertisers who did not want their ads appearing next to inappropriate content since Musk's takeover in October.
Ad revenue had fallen 50%, Musk said last month.
Mark Read, CEO of the world's largest ad group WPP, said the re-branding "took people a little bit by surprise".
"Clients cannot understand where the platform is heading and what its character will be in the future," he told Reuters.
"Some clients are dipping their toe back in, but overall I'd describe it as wait and see," he added
