WPP today lowered its expectations for full-year organic net sales and profit margins in the advertising industry, saying it now expects like-for-like sales to come in flat, compared to a previous forecast range of 0 to 1 percent.
Facebook and Google have disrupted the industry, an online statement from the British advertising and public relations firm said, while management consultancies attempting to take a slice of the ad agency pie have resulted in a focus on reducing costs.
The advertising conglomerate added that low interest rates and "zero-based" budgeting from clients have also contributed.
WPP Chief Executive Martin Sorrell has spoken of Facebook and Google's impact on his business many times before. Although WPP spends around $5 billion a year with Google on behalf of clients, and a further $2 billion on Facebook, he has often referred to them as "frenemies" — and more recently "flexible friends."