WPP Shares Rise After Amazon Account Win

By Adria Calatayud

WPP shares rose and had their best day in more than a year after Amazon.com picked the U.K. advertising group and U.S. peer Omnicom Group as agencies for its consumer business.

Shares in WPP traded up 5.1% at 743 pence, the stock's biggest one-day percentage gain since February last year, reducing losses since the start of the year to 1.3%.

"After a comprehensive advertising agency review for our consumer business, we've chosen to partner with OMG and WPP," Amazon spokesperson Margaret Callahan said.

The news was first reported by Adweek.

Amazon decided to split work carried out by Interpublic Group of Cos. over the past decade between its two partners, with Omnicom handling the Americas and WPP in charge of Europe, the Middle East and Africa as well as Asia Pacific.

The award comes at a challenging time for WPP, which last month cut its full-year organic growth guidance citing an uncertain outlook, challenges in China and project delays around the world.

Amazon's media mandate is valued at about $2.5 billion, analysts at Citi said in a research note.

While the news is helpful for earnings, it is more important from a strategic point of view, as a win of this scale is a significant validation of the capabilities of WPP's GroupM media-buying businesses and should reassure investors that the group isn't structurally at risk, the Citi analysts said.

Write to Adria Calatayud at adria.calatayud@wsj.com

(END) Dow Jones Newswires

September 05, 2024 10:56 ET (14:56 GMT)

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