Welcome to our third quarter presentation. Martin is live on video in New York, and I'm sure he'd like to make a few opening comments before I start. .

Well. We've got a lengthy presentation. Paul will cover the numbers for the third quarter and for the first 9 months. And then I'll come back and talk a little bit about how we see the industry and how we see the -- our strategic objectives and structural changes in relation to that. .

So Paul, if you will, just cover the numbers. .

I want to just mention Martin, who we have with us.

So we can introduce them now?.

Well, we got in -- I think, in London, we have Brian Gleason, who heads our [m]PLATFORMs and Xaxis and Triad Operations; Mark Read, who heads Wunderman. And I think we have Jon Cook on the line, who couldn't be with you physically in London or physically here with me in New York, on the line, who heads VML.

And they'll be able to talk a little bit more about 2 or 3 of the challenges that we see to the industry. Of course, I've seen in the analysts' comments this morning considerable debate as to whether these are the issues or not or which of them are the key issues. And no doubt, we can pick that up in the Q&A later. .

So Paul, over to you on the numbers. .

Okay. Thank you, Martin. This is our third quarter trading statement for 2017. Okay. So on our third quarter reported revenues, they were up 1.1% GBP at 3.649 billion. Foreign exchange was positive 1.5% in the quarter, which means that on a constant-currency basis, revenues in the third quarter were down 0.4% and on a like-for-like basis were down 2%. .

Our preferred measure as you know is on a net sales basis, which takes account and removes the effect of pass-through costs and principal digital media buying revenues. So on a net sales basis in the third quarter, growth was 2.4%. Again, currency was positive 1.5%.

So on a constant-currency basis, you had net sales growth of 0.9% and on a like-for-like basis, third quarter net sales was down 1.1%. .

On a 9-month reported revenues were up 8.9% at GBP 11,053,000,000. Foreign exchange was heavily positive to the 9 months at plus 7.8%, leading to constant currency reported -- constant currency revenues up 1.1% for 9 months and down 0.9% on a like-for-like basis to the 9 months.

Again on our preferred measure, the year-to-date or 9 months net sales growth was 9.7% reportable. Foreign exchange was positive 8%. So on a constant-currency basis, the growth was 1.7% and on a like-for-like basis, the decline was 0.7%. .

The 9 months operating margin is up 0.1 margin points on a reported basis. It is flat with last year on constant-currency basis and up 0.1 point on a like-for-like basis. And on the full year basis, it's now targeted to be flat in constant currency for the year. .

The average constant currency net debt was up GBP 519 million for the first 9 months to just over GBP 5 billion, primarily reflecting continued significant acquisition activity and share buybacks over the last 12 months. .

Net new business of $6.363 billion in the first 9 months compared favorably to the $5.374 billion in the same period last year and the group is leading in net new business league tables. .

In the 9 months, the share buybacks have totaled GBP 396 million or approximately 1.9% of share capital compared to GBP 342 million or approximately 1.6% of share capital for the same period last year. And the full year target for buyback still remains within the 2% to 3%. .

So focusing on the net sales and building up from the like-for-like, let's say, that the third quarter minus 1.1%, acquisitions adding 2% in the quarter. Therefore, on a constant-currency basis, the growth for the quarter was 0.9% of net sales, on a year-to-date basis was 1.7%.

Foreign exchange, adding 1.5% in quarter 3 or 8% year-to-date, shows on a net sales basis the reported for the quarter, the growth was 2.4% and on a year-to-date basis, 9.7%. .

If we were a dollar reporting company, the quarterly growth wouldn't have been 2.4% or would have been 2.1%, it's very similar. If we were reporting in euros, our growth in the quarter would have been minus 3%. And if were reporting in yen, our growth would have been plus 10.7%. .

So the effect of the currency in the quarter accounts for a plus 1.5% increase in reported revenues, reflecting the weakness of the pound certainly against most currencies, but not the dollar, as you can see here, and -- but less so than previous quarters.

So the main currency impact is against the euros and other various currencies listed down on the table here. So year-to-date, you can see the impact of foreign exchange. So last year, it's approximately plus 10%. Very strong in quarter 1, around plus 13%. Quarter 2, around 9% to 10%.

Quarter 3, as I just mentioned, plus 1.5%, and will be a headwind in quarter 4. So the full year expectation is still to be positive, a tailwind of around 4% to 5% on revenues and net sales on a full year basis 2017 from currency. .

We do analyze and put in the press release the full quarterly -- quarter-by-quarter analysis of our sales, again, on a revenue basis because no one else reports on a net sales basis.

The quarterly trends in revenues that you can see ourselves and another number of other competitors having a weakening trend in the quarterly revenue net sales 2-year analysis that you can see here on the chart. So I'm going to start it earlier in the process, but a number of us are actually having a weak quarter 2 and quarter 3. .

In terms now, revenue and net sales for the third quarter. And I just want to go through, if I can, the quarter-by-quarter net sales like-for-like basis that builds up to the minus 1.1% for quarter 3. So just to remind you, just -- referring to net sales on like-for-like basis, quarter 1, we were positive 0.8%. Quarter 2, we were minus 1.7%.

For the half year, we were minus 0.5%. Quarter 3, as I listed out here, was minus 1.1%. And the 9 months, I'll come on to a second, was minus 0.7%. So on this chart, I'm going to compare the third quarter of minus 1.1% to the second quarter, which was minus 1.7% and tell you how we compared.

So in advertising, media investment management, which represents around 46% of our revenues and has net sales of GBP 1,412,000,000. We saw a like-for-like decline of 1.7% in quarter 3. However, it followed a steeper decline of minus 2.9% in quarter 2.

In data investment management, which represents about 18% of our business, we saw net sales of GBP 496 million. We saw a decline in the quarter of minus 1.4%. However, that did follow a steeper decline in data investment management of minus 2.8% in quarter 2 this year.

In public relations and public affairs, which represents about 8% of our revenues, were GBP 282 million of net sales. We saw a worsening in quarter 3 with a decline of 1.4% following a flat quarter 2 in 2017.

In branding & identity, healthcare and specialist communications, representing around 28% of our business or GBP 1 billion of net sales, we saw basically flat in quarter 3, very similar to where we were in quarter 2. .

And moving now to the year-to-date basis. Looking at the same analysis comparing to how we were at the half year. On advertising, media investment management, on a like-for-like net sales basis after 9 months, we are minus 1.7%, exactly as we were at the half year minus 1.7% in that discipline.

In data investment management, after 9 months, the net sales like-for-like grew minus 1.7%, slightly better or similar to where we were at the half year, where we were minus 1.9%. Public relations, public affairs, where on a year-to-date basis, we've grown at 0.7%. It is slowed slightly from the half year rate of growth of 1.8%.

And in branding & identity, healthcare and specialist communications, which after 9 months have growth 0.7%, is very similar to the rate of growth of the half year rate as well. So overall, after 9 months, we were down 0.7%, having been down 0.5% at the half year..

So some comments about each of the disciplines. So in advertising, media investment management, for the third quarter, we saw constant currency, which does include acquisitions growth of 4.2%. Like-for-like growth in quarter 3 of minus 1.7%, like I said, improved on the quarter 2 rate of decline which is minus 2.9%..

Advertising grew in Continental Europe, Latin America and Africa, but North America, U.K., Asia-Pacific and Middle East were more difficult. Ogilvy performed well in the U.K., Latin America and Middle East. J. Walter Thompson performed well in Africa and Latin America. Grey was strong in Asia Pacific, Latin America and the Middle East. .

On media investment management, we were up strongly in Latin America, Africa, Middle East and the U.K., but Asia-Pacific was weaker. .

In terms of acquisitions, in advertising, we acquired hug digital in the Middle East; Sensio in France; Thjnk in Germany; and Step-up in Menacom in the Middle East in marketing communications. In media investment management, the acquisition of LOOM in urban innovation sponsorship was completed in the USA. .

In terms of data investment management for third quarter, we saw constant currency net sales decline of 1.7%, very similar to the third quarter like-for-like decline of 1.4%. But it was an improving trend compared to quarter 2, where on data investment management, we were down 2.8% and on the first half, we were down 1.9%. The U.K.

and Latin America were growing in the quarter and all other regions except Africa and Middle East were improving in trend compared to quarter 2. The Kantar Media, Kantar Worldpanel, Lightspeed, Kantar Retail and Kantar IMRB are all growing. .

In public relations and public affairs, our constant currency net sales was down 1.3% and saw like-for-like growth of minus 1.4% in the quarter. Western Continental Europe, Asia-Pacific and Middle East were up strongly in quarter 2, while North America, U.K. and Latin America were weaker than the second quarter.

In the first 9 months there was strong growth globally at Cohn & Wolfe, in social media content developments at SJR, in Glover Park, in Ogilvy public relations in USA, Buchanan in United Kingdom and Hering Schuppener in Germany..

Turning you now to branding & identity, healthcare and specialist communications, we saw constant currency net sales decline of 1.6% and the third quarter like-for-like growth was flat. This is the strongest sector and a slight improvement over quarter 2.

Branding & identity, digital, eCommerce and shopper marketing and specialist communications grew, healthcare was more difficult. In the branding & identity, acquisitions of Design Bridge recently [indiscernible] in U.K, Urban Vision in Italy and in healthcare and investment in The Mighty in the USA. .

And turning now to digital across the group, so this is digital revenues from all the 4 disciplines. In the first 9 months in 2017, digital revenues totaled $5.7 billion or approximately 41% of our total revenues.

This is up from approximately $5.4 billion or 39% for the group last year, 7% in constant currency, again, supported by the acquisitions, was up over 2% in like-for-like revenues and was up almost 3% in like-for-like net sales. The number of people working in the group for digital was almost 49,000 or 36% of the headcount.

And our acquisitions in DIS/PLAY in the quarter in France, Pierry USA, Step-up in Pmweb in Brazil, investments in CBC in China, Fatherly USA, Gimlet USA and Within in the USA..

Turning now to the same analysis by geography. So North America, which represents around 36% of the revenues will have net sales of GBP 1.157 billion. So a worsening in quarter 3 with a decline of minus 4.9% compared to quarter 2, where the decline was 3.3%.

In the United Kingdom, which is 13% of our revenues or net sales of approximately GBP 405 million, saw growth at a lower rate in quarter 3 of 2% compared to the growth in quarter 2 of around 4%. In Western Continental Europe, representing 20% of our revenues or GBP 629 million of net sales.

We saw a much better quarter 3 growth of 1.6%, following a rather choppy first half, where quarter 1 was growing at 4.8% and quarter 2 declined 4.2%. So overall, an improved picture in Western Continental Europe.

In Asia-Pacific, Latin America, Africa and Middle East and Central Eastern Europe, representing 31% of our business, was just under GBP 1 billion with a stronger growth in quarter 3 of plus 0.9% compared to minus 0.4% decline in quarter 2..

Doing the same on the 9 months year-to-date basis. So North America saw like-for-like declines after 9 months of 3.1%, slightly worse than the half year decline of 2.2%. The United Kingdom saw similar rates of growth after 9 months of 3.2%, having grown at 3.8% in the first half.

In Western Continental Europe, we saw first half decline net minus 0.3% and after 9 months a positive of 0.3%. And in Asia-Pacific, Latin America, Africa, Middle East and Central and Eastern Europe, we saw growth will be at modest at 0.1% positive after 9 months having declined by 0.3% after the first half.

So again, the first half, we were down 0.5% and like-for-like net sales after 9 months is down 0.7%. .

We now show 2 charts on both revenues and net sales, 7 subregions showing both the quarter 3 and the year-to-date. I won't go through the individual subregions on revenues, I will do so on net sales. But sort of focusing on the year-to-date on revenues where mature markets are basically down 1% and the faster growing markets are flat. .

So turning now on Slide 19. On a net sales basis, again showing where we have performed in the 7 subregions in quarter 3.

So as we mentioned before, we saw growth coming through in Latin America strongly, 7.3%, in the United Kingdom, growth of 2%, in Western Continental Europe, growth in the quarter of 1.6%, and in Central and Eastern Europe, growth of 5.3%. .

More challenging regions included USA, where we saw declines in revenue of 4.9%. Africa and Middle East, where we were flat. In Asia-Pacific, it's current mix, but net down 1.4%, with good growth coming through in Indonesia, Philippines, Thailand, Vietnam in particular.

Overall then, for the 7 regions, we saw year-to-date in the mature market declining 1.1% and the faster growth markets flat after 9 months..

Turning now to the 6 major markets and showing you the full year '15 both revenue, net sales, '16 similarly and the 9 months year-to-date for each of the major 6 markets. So you can see here, the trend on both cases, obviously, weakening in the U.S.A., as I've mentioned, minus 3.3% after 9 months, continue to be strong in the U.K.

with growth of 3.2% on net sales or 3.6% on revenue. Germany is basically flat after 9 months, down 1% in net sales or flat on revenue.

China, after difficult start, had a better third quarter, but is still negative for the year, it's positive, actually, in quarter 3, both in Mainland China and Greater China, but still year-to-date were down 2.6% on net sales.

Australia, New Zealand, our numbers are too similar to the public company numbers, and therefore, we can't report them until they report their full year numbers at the end of the year. But in France, we saw positive net sales growth after 9 months of 1.2%. .

Doing the same for the BRIC market, we see, which represents almost 12% of our revenues and net sales, which overall we saw revenues down 1.7% and net sales down 0.9%. As I mentioned, Greater China and in Mainland China, although we were positive in quarter 3, was still down year-to-date.

India, which has definitely been I think quite significantly impacted in our business by the Goods and Services Tax and was a big sufferer in the malware attack, has been year-to-date sales at 1.7%, and we are expecting a very good final quarter, but did have some disruptions in the third quarter.

Brazil, overall growth of 1.2% we've seen year-to-date. And Russia, we're down 2.5% year-to-date though although they are expecting a positive quarter 4..

So in North America, on a constant currency net sales, we were down 1.9% and like-for-like we were down 4.9%. This is our weakest performing region and worse than quarter 2 and the first half.

Further softness across most of the business, although data investment management and parts of the group's specialist communication businesses improved over quarter 2. In United Kingdom, we saw constant currency net sales growth of 2.8% and like-for-like growth of 2%, our strongest region, but slowed compared to quarter 2 in the first half.

Strong growth in media investment management, data investment management, branding & identity, healthcare and digital, eCommerce and shopper marketing, but public relations, public affairs were softer. In Western Continental Europe, we saw the strongest constant currency net sales growth of 3.8% and like-for-like growth of 1.6%.

We saw marked improvement over the performance in quarter 2, particularly in Denmark, Italy, Netherlands, Norway, Portugal and Spain. Advertising, public relations, and public affairs, healthcare and digital, eCommerce and shopper marketing were all up.

In Asia-Pacific and Latin America, Africa and Middle East and Central and Eastern Europe, we saw constant currency net sales growth of 2.1% and like-for-like plus 0.9%. Latin America, Africa and Middle East and Central and Eastern Europe improved significantly. Asia-Pacific was more difficult.

China and India were under pressure in the third quarter, in India in particular. .

So listing out approximately our top 30 countries. On a pro forma like-for-like basis for net sales. You can see very strong performance in Argentina. Mexico and Poland in double-digit growth. Strong growth in some of the Asian markets, in Indonesia, Philippines, Thailand and other European markets doing quite well Spain, Sweden and Turkey.

Then you saw the majority of our major markets in the 0 to 5% were not growing in quarter 3 listed out here. I won't go through them all. And likewise, by category, again, this just the third quarter snapshot on how we're doing. Obviously, it is impacted by wins and losses, so we have had some good wins in the electronics area for last year.

Electrolux and Sony just to mention a few, but then that are impacted by losses that we have incurred in the auto category and telecommunications category last year. And obviously of the major categories, automotive, food and personal care and drugs, are 3 of those major categories in the less than 0% category..

In terms of wins and losses on new business, this is trade estimates. We had highlighted in blue both wins and losses that have occurred in the third quarter. We've had a good number of global wins actually principally media, but not all.

The Sanofi Partnership, the $600 million billings of one in the third quarter as were wins in Revlon, Richemont and Campari. Some are media and some across all categories for those clients. I won't list them all out, but they are here on a year-to-date basis listed for the major trade reported bidding to win on the next 2 pages.

Likewise, we've had one loss in the quarter, the Wavemaker, has lost a global piece of business in Michelin in media, about $100 million of billing..

So let me look at our own analysis of net new business wins in the third quarter. We're approximately $6.3 billion one year-to-date, around 20% or 18% higher to be precise than the $5.3 billion at this point last year. And at the half year point, we had won $4.2 billion. So we are trending at around $2 billion of wins per quarter for the 9 months.

And then in the post-end of September i.e., October analysis, we've had a couple of nice wins coming through. Certainly, government business in Australia, we had 2 wins actually, one here it's listed in Victoria and one was smaller, so it doesn't meet the criteria precise, but otherwise very successful.

We've had a switch of our A-B InBev business, having lost out in the realignment in USA, Australia, India and having picked up Latin America. .

Now turning to cash flow and net debt. The September year-to-date average net debt was up GBP 519 million to just over GBP 5 billion compared to GBP 4.5 billion in 2016 at constant exchange rates.

So net acquisitions, including earn-outs for September year-to-date were GBP 409 million compared to GBP 370 million and share buybacks of GBP 396 million compared to GBP 342 million.

As at 30 September, the net debt was up almost GBP 1 billion to GBP 5.6 billion compared to GBP 4.7 billion last year at '17 constant exchange rates, primarily affecting continued significant acquisition activity and share buyback.

If you go through the press release, you'll see that we spent in the last 12 months around GBP 286 million more than we have generated.

And the temporary impact of delayed billing of the malware attack and implementation of the Goods and Services Tax in India, which was a major headache for us and has been slow in terms of the media receipts because they have been incorrect, which has hampered our ability to bill and collect in the quarter.

We are expecting that to reverse by the end of the year. .

So consistent with the half-year, our average net debt headline EBITDA for 12 months of September remains towards the top end of our target range of 1.5x to 2x. .

In terms of year-to-date, we've done around 36 transactions, around 2/3 of those are in the quantitative and digital. I won't go through them. I have listed them by category as we've gone through.

And 4 are outside either in the outside -- the categories are either fast growth market for quantitative and digital that we've done in advertising, branding & identity and health and wellness. .

In terms of how we compare with our goals in terms of our target. So in acquisitions, excluding the earn-out, new acquisitions, we spent GBP 262 million compared to GBP 305 million last year. Although, last year was a strong final quarter, where we spent GBP 600 million in total. Our share buybacks, as I mentioned before, just under GBP 400 million.

Approximately 1.9% of the group year-to-date and 1.6% a year ago same time. Dividends obviously not relevant in this quarter. In the payout ratio, we've hit our target ratio of 50%. .

And finally from me, just the maturity debt profile. We have one eurobond up in March '18 of EUR 262 million. So you can see here we have an average maturity of around 10 years and a coupon of around 3% in the portfolio. .

And with that, I'll hand it over to Martin. .

Thank you, Paul. I hope you can see me now. We've entitled the second section a changing industry question mark and tried to focus on 3 issues or areas that analysts, investors seem to be focused on.

The first is to put it a little bit more crudely, are Google and Facebook eating our lunch, as the change in social media and search created structural change. The second whether consultants are doing, likewise, particularly in the digital area.

And the third, whether low-cost, looser monetary policy since Lehman in 2008, whether that's causing significant changes to the industry as well. .

So just turning to the first slide, which is Slide 35. It's difficult to come to conclusions about what may or may not be happening.

But if you examine our top 10 media owner destinations, that's -- of our current billings of around GBP 70 billion, of which media is about GBP 50 billion, where is the money going? Where is the investment going? We call it media and investment management.

And if you look at the top 10, Google and Facebook certainly, last year and this year, probably, will be in positions 1 and 3. I say probably because it's possible that Facebook's growth will take it beyond 21st Century Fox, News Corp, Sky and Foxtel into second position.

But you can see, there's been a fairly dramatic change, not so much in terms of the traditional media analyst in comparison to 2012, but in relation to Google and to Facebook. Google, in 2012, was #4. And Facebook didn't even make the top 10.

In fact, on the footnote, you'll see that they were ranked 28th in terms of destination for media and investment. And I will just point out that both Google and Facebook do specialize in the long tail. .

And the next slide, in Slide 36, tries to estimate what our market share is of both digital and traditional billings. And if we look at it in terms of our market share, that's the -- on the right-hand side, you can see that our market share of digital according to our calculations, is something like 18%, 19%, 20% over the last 3 years.

Now this is estimated. When we asked Google and Facebook as to what the long tail consists of, it's difficult to get statistics. But Facebook certainly, do indicate they have 5 million advertisers on Facebook and 17 million businesses are active on Facebook. Instagram itself, part of Facebook, effectively has 2 million advertisers.

So the long tail is very significant.

And Adam Smith that you all know is involved with GroupM's forecast and estimates, calculates the long tail accounts in his view, SMEs, would account to 70% roughly of Google's and Facebook's advertising revenues, which is the share in Google's case, will be something like $100 billion and in Facebook's case will be about $40 billion. .

So looking on the left-hand side of Chart 36, you can see that WPP's billings growth in digital over the last 3 years has been 26%, 38% and this year, is estimated to be around 26%.

And that digital billings growth is based on 5 analysis of 5 digital media owners, not just Google and Facebook, but Amazon, which is a growing force in advertising online. Twitter and Snap. So we've taken those 5 and effectively indexed them and indexed the growth.

So in digital, our growth rates, advertising revenue growth has been around -- for those 5, has been around 23%, 34%, 26%. And WPP's billings growth in digital have been 26%, 38% and 23%. And you can see that our market share is on the right-hand side, assuming that 70-30 split, as Adam indicates, have been around 18%, 20% and 19%.

On traditional, we've done the same calculation. We're obviously using different media owners. We're taking 10 media owners, the Fox, News Corp, Sky, Disney, CBS, Viacom, Time Warner, Comcast, ProSieben and ITV. And indexing their growth, you'll see minus 2% in 2015, 1% in 2016 and minus 1% in 2017 estimate.

And you can see our billings growth was down 6% -- traditional was down about 6% in 2015, down 1% in 2016 and pretty much in line with the market minus 1%. Obviously, these figures reflect gains and losses. They are not pro forma. It cannot be a pro forma for gains and losses, that gives you a rough idea.

Interestingly, also, from a market share point of view, again, making that assumption that Adam makes in terms of the split of business between the long tail and we have one called the short tail, share again around that 20%.

So if we look at it in terms of Facebook and Google's growth, our growth and share has been significant and very similar to what we've seen in traditional media over the past few years..

Turning to the second question on Slide 37. Are consultants eating our lunch? One of the slightly disturbing things is that the Ad Age estimates, for example, the trade publication estimates for digital penetration by Accenture and others is somewhat inaccurate, to put it mildly.

On the left-hand side of Slide 37, which show the latest published table in Ad Age, which is meant to indicate the size and the scale of various Internet interactive digital activities. On the right-hand side, it is our estimates of the actual digital revenues, and we're grouping ourselves and Publicis and Omnicom in the Ad Age estimates.

Obviously, there are some that the group like Accenture or IBM iX or Deloitte Digital. But in analyzing the agencies, Ad Age has failed to take into account each of these individual agencies are part of the group. And in the Omnicom's case, the only one they've quoted is Omnicom Health Group which is slightly bizarre to say the least.

On the right-hand side, we've given the estimates that come from the companies themselves, not only ourselves and Publicis and Omnicom and Dentsu and IPG, but go beyond that to Accenture Interactive, IBM iX, Deloitte Digital, PwC Digital and then Epsilon at position 10.

And we just point out that these figures themselves, in the case of Deloitte Digital, the claims figure is $2.6 billion.

And actually, you can find them on the web, a presentation entitled This is Deloitte Digital, which indicated, so this is internal from the company itself or the group of companies itself, where their estimated billings in 2016 would not have been $2.6 billion, but $0.7 billion. .

So there are significant issues in relation to the calculations and penetration. If that wasn't enough, what we've tried to do is to give you an idea of what's been happening on the ground. And no doubt, Mark Read, Brian Gleason and Jon Cook can add a little bit of more detail to what's been happening.

But we've asked our businesses to try and estimate the actual number of pitches or examples of pitches, and we've chosen a figure in excess of $2.5 million of revenue for each project or pitch.

And just looking at it in summary on Slide 38, we calculate it, then in the first 9 months of the year, there have been approximately 71 pitches in which we've collided in one way or another with the major consulting digital agencies. Of those, about 45 were wins and losses were about 24, and there were a couple that weren't awarded.

So a win-loss ratio of about 2:1. There are 16 pitches pending. But you can see, of those 71, the total revenues involved were about $92 million. So in the context, again, going back one slide to the revenues quoted by ourselves and our direct competitors and our indirect competitors, we're not talking about very significant amounts.

But to give you an idea, and on the left-hand side, we've specifically referred to the WPP agency or a set of agencies involved, the consulting company that was involved, the account where we can give the specifics and the rough revenue involved.

So this is just to underline that in the digital spaces, the amount of competitive activity, whilst much talked about in terms of weight of revenue and scale, has not been significant as others might suggest.

And I think just to underline the point, where we think -- and as we've said in the press release today, where we think consultants have made headway is when they approach CEOs or indeed CMOs or CIOs or CTOs, and indicate to them that their company might be overspending or spending too much and that they're prepared to audit that spending on a contingency basis, i.e., no fee unless costs are reduced.

That is probably a more weighty area from a consulting point of view than the suggestion that in the digital area, they've made that much headway, which then brings us to the third point, which we've visited before that in the context what we call low-cost of capital causing, capital allocation distortion, that in the general context, there is disruption, digital disruption, not just in production with robotics or 3D printing, not just in media, with say Google or Facebook or whatever, but also in distribution with Amazon and Alibaba, and the 3 examples that we've given on Slide 39, Airbnb in hospitality, Uber in transportation and Amazon in distribution.

There are a series of activist investors that have been particularly active in the package goods space. Currently, Nelson Peltz has taken a 1% position in Procter & Gamble; Dan Loeb has taken a 1% position in Nestlé. But there are other examples.

And I think it's only fair to point out that both Nelson Peltz and, indeed, Dan Loeb have made the point quite strongly that they're strong proponents of increased marketing spend and increased investment in innovation and marketing spend.

But I have to say the Pavlovian reaction of the companies when they take a stake in them is to reduce their spending or cut their agency costs. So that's one area.

And the second area, which we've talked about before, is the so-called zero-based budgeters and of course, Kraft Heinz partnered 3G Capital made their temporary bid for Unilever in February, which I think was a pretty seminal moment because it did indicate, much to everybody's surprise, that nobody in the packaged goods sector was safe.

But there are other examples of cost-focused companies, like Coty, like Reckitt Benckiser and historically in the pharmaceutical space, Valeant and Endo. .

And just to point out, again, this question of distortion. If you look at the leading consumer packaged goods, and Lisa and Fran, Lisa Hau and Fran Butera have done an analysis of what is effectively now the last 4 quarters, looking at leading consumer packaged goods clients and their published results.

And then like-for-like revenue growth, that is pricing and volume, have improved by around 2% over those 4 quarters. But pricing has led volumes very significantly, although to some extent volumes are picking up, but that very low levels in relation to what's been happening to advertising..

So for example, if you look at quarter 3, organic growth was about 2.4%, of which -- the touch and the total growth, of which price was about 1.3% and volume was about 1.1%.

And you go back through the previous 3 quarters, you can see the price of 2.1% and 1.5% and 1.3% played a far more important role than volume at 0.4%, minus 0.6% in Q1 of '17 and pretty flat in Q2 at 0.1% and a slight pickup in Q3 '17..

The other point about the volume growth and the price growth is that U.S. growth remains behind non-U.S. international growth as the faster growth markets have started to accelerate. And maybe we've seen more competition from smaller, more focused companies in those markets over the year..

So the big question is about what's happening to volumes? And on Slide 41, we've taken a look and we haven't identified the companies, and they're all fast-moving consumer goods companies. And we've given the sales progressions and operating income progressions and margin progressions of those 4 companies.

And you can see their margins all -- in all 4 cases are up very significantly. However, if you look at the quarterly organic growth, which is the graphs to the bottom of each of the 4 verticals, and you can see that the volume growth is shown in green and the pricing growth is shown in the light green or the beigey green.

And you can see that in company A and B, you can see that volume growth has played much less of a part in their growth, although in the case of B has resumed growth in the past few quarters or quarterly organic growth of FMCG C, the third one, has been pretty consistent, interestingly of the 4.

Actually, it has been the most consistent with pricing being a little bit of an add-on. And in the case of FMCG D, virtually no volume growth at all with the exception of one quarter. I think it was in 2015. The point of this slide is that volume growth is under significant pressure in all cases, whilst margins have continued to improve.

So costs are being cut in our view. That had an impact on volumes. And volume growth, which is key for packaged goods growth, will only return when there is more investment in marketing. I mean marketing is a not a cost as an investment..

And just to emphasize the point about distortion. If you look at the S&P 500 by sector on Slide 42 and particularly compare information technology or tech, where we are seeing significant growth, the average top line growth of tech has been about 8%, just over 8% over the last 4 quarters.

The price earnings multiple -- historic price earning multiple is about 19x. Whereas for consumer staples, which is where the FMCGs reside, has been about 2.8%. So about 1/3, somewhere between 1/4 or 1/3 of the growth rate of IT or technology, but the P actually is even slightly greater at 20x.

So what we think we're seeing is a distortion because of cheap capital of the suggestion that these companies might be attacked, taken over, sought after. And that is reflected in valuations as you look at GDP. .

On Slide 43, we just reiterate how we see the world, not just, to be fair, in 2017, but pretty much since Lehman, a low-GDP-growth world, a low or no inflation, little pricing power and a very significant focus on costs. And that's exacerbated, as we've said to you before, by CEO tenure.

And some of the latest statistics show even lower tenures than that, 6 to 7 years going down 4 to 5; CFOs at 4 to 5 years; and CMO tenure, 2 to 3 years. And that results again, as we pointed out before, in share buybacks and dividends increasing to a level where they are in excess of retained earnings.

And in most of the recent quarters, certainly, we see steady progression to over 100% of operating earnings. But in most of the recent quarters, dividends and buybacks have exceeded 100% of retained earnings, which effectively means that management is abrogating or passing over responsibility to reinvestment to institutional investors. .

And that's mirrored in the stats that we see for the FTSE 100, the previous data with the S&P 500. And it's mirrored also in what we see as total investment as a percentage of GDP, certainly in the case of the U.S.

In the case of the U.S., we've not seen a return to historic levels of investment as a percentage of GDP really since the second decade of this millennium. Obviously, in our own interest, we point out that this is not a phenomenon that we think leads to total shareholder return.

For the last 12 years, we've been tracking very carefully the performance of the 100 top brands that we identify around the world. It's -- every year we do this with the Financial Times. And if you invest equally in those 100 brands over the last 11 or 12 years, your portfolio will be up 154%.

The S&P 500 will be up just under 100% and the MSCI will be up about 48%. So you get almost a 3x better return than the MSCI in our 100 top brands. These are the companies that invest in innovation and brand, and about a 50% greater return in these strong brand companies than you would do in the S&P 500..

So given that background, what are we doing at the WPP to try and deal with it? Well, there always have been 4 things, and they're 4 things that we're increasingly focused on and more focused on perhaps than we have been before because of the pressure that we see in the environment. The first is to provide a seamless and fully integrated offer.

The second is to continue to focus on the fast-growth markets. Those are the markets, which we think will provide the next billion consumers, which a lot of our clients are focused on, principally in Asia, in Latin America, in Africa and the Middle East, to Central and Eastern Europe.

And those markets already provide about 30% of our business, but we really believe that they should be close to half of our business within a very short period of time. .

Similarly, as we touched on already, digital is already 40% of our business. We have a strong, a very strong business in the digital areas. But clearly, digital will penetrate everything we do. And we anticipate, although it's 40% now, it'll be very close to half of our business within the next 3 to 4 years, if not before.

And we've already achieved the 40% to 45% target that we sent historically in the first 9 months of this year. .

Data investment management or data and the quantitative disciplines are already 1/2 of our business. And data on its own is 25% of our business. And that's another area of considerable focus. .

In terms of simplification and horizontalities, as we call it, I mean, there are 2 horizontal integrators at a client level and at a country level. And we're making considerable structural change already in 2017 and beyond through the creation of teams and appointment of country and subregional manager, which I'll come on to in a second.

But on an operating-country level, there's been very significant integration already. Ogilvy, under the leadership of John Seifert, is very focused on its next chapter and creating One Ogilvy. With inside GroupM, we've simplified our brand structure; and MEC/Maxus have been merged to create Wavemaker.

And at the same time, we've expanded the growth and development of Essence, a highly focused digital agency, its principal client being Google and its digital expansion.

At Kantar, Eric Salama has instituted a program that started in 2016 at Kantar First, which is the integration of our data business, which as I've already indicated, is 25% of our business. .

At WPP Health & Wellness, using the WPP brand for the first time at an operating-company level, we've integrated 4 health care companies, a business of over $500 million in terms of revenues. A similar approach in branding and identity at the BtoD Group. And last, but not least, Wunderman. Would not read here who leads that.

We've integrated POSSIBLE and Salmon and Cognifide and Acceleration into the Wunderman structure. So you'll see even more in terms of simplifying the offer. .

So if you look at each of these 4 targets, these strategic targets, you see on Slide 51 the progress that we're making. In terms of horizontality, across core client teams, we now have 50, covering about 1/3 of our revenues, about 7 billion of the 20 billion of revenues.

In terms of the fast-developing markets, as I said, they're already up to 42.5% or getting towards the 42.5% target that we've said. But overall, we're roughly around 30% of the group as a whole. .

In terms of digital, we're at -- we're pretty much in the target range of 40% to 45%, now crossing 40% in terms of digital revenues. And in terms of more measurable marketing services, such as data and quantifiable services, we're at target at 50%. .

In terms of the structure of the company, the matrix really consists of verticals, covering advertising, media investment management, data investment management, public relations and public affairs, branding and identity, health and wellness and then digital.

And then the horizontal integrators are global client teams, the 50 I've mentioned; the country and regional managers covering about 53 of the 100 or so markets, 112 markets that we operate in; and then cross-group communities and practices where necessary, such as retail.

But the primary horizontal emphasis is on global client teams and country regional managers, as you can see in Slide 52..

In terms of our priorities with horizontality, it's very much, certainly, on a local basis, on people, on clients, on acquisitions, trying to ensure that our people work across businesses and geographies to deliver the best resources for the clients.

And the clients are really interested in the best people working on their businesses, not necessarily which vertical they come from. To deliver specialist skills, and we've listed a few on Slide 53, is our key, and to focus on client needs and their business issues.

And we've added recently on the back of team wins, British Airways, Team Horizon; Campari with Team Campari; Google's Team Google; Sanofi's Sanofi Partnership; and Walgreen Boots Alliance, the W Partnership. So these are specific examples, usually on the back of extensions of new business activity of what we've been able to do. .

On Slide 54, we just summarize where we've got to on the third quarter and year-to-date. As Paul outlined, our year-to-date reported net sales growth is 9.7%; in constant currency, 1.7%; but on a like-for-like basis, just under minus 1%. Constant currency revenue growth in quarter 3 in the U.K.

and Western Continental Europe and in advertising and media investment management was stronger but with particularly strong growth geographically in the U.K. and the subregions in Canada, in Latin America, in the Middle East and Central and Eastern Europe.

From a functional point of view, advertising and media management, branding identity and part of our group's -- part of the group's Specialist Communications businesses were also stronger, principally in digital. And there's a decreasing net sales tailwind from foreign exchange, which was almost 14% in Q1, almost 10% in Q2, 2% in Q3. .

Client spending from quarter 2 was under considerable pressure, with quarter 2 and quarter 3 like-for-like net sales down 1% to 2%, although there was an improvement. And so the deceleration of the negative in quarter 3 over quarter 2. And the 9-month operating margin was up 0.1 margin points reported.

It was flat in constant currency and up 0.1 margin points like-for-like. And it's now targeted on the basis of our Q3 RF, which was not reviewed as yet, but we'll be doing so in the next 2 weeks, is now targeted to be flat in constant currency for the full year. .

But by the way, this -- I was reading one analyst commentary that this -- our guidance on margins is different to what we've done historically. That is not so. The wording and guidance is exactly the same as it was before.

Year-to-date, as Paul pointed out, there've been 36 acquisitions, and that's added in terms of organic -- inorganic growth about 2.4% to net sales. .

So finally on Slide 55, the outlook for 2017. Our forecast indicate vis-à-vis unreviewed Q3 RFs, like-for-like revenue net sales growth broadly flat for the year. Margin improvement is now targeted flat, excluding currency, off a constant currency base margin of 17.3%. And acquisition should add somewhere between 2% to 3% to revenue and net sales. .

At current exchange rates, the full year currency impact will be 4% to 5% as a benefit to revenue and net sales. Our staff costs, as you've seen from the headcount numbers in relation to revenue growth and net sales growth, staff and headcount remain well controlled to deliver the margin target.

And the operational effectiveness and efficiency programs will support that, not just this year, but in the future. We provided, as usual, some background information in addition in the leave behind. .

But we're now, Paul, ready to take questions. And I think we should start with you in London. .

If you could just let Martin know who you are, please. Yes, thank you. .

It's Ian Whittaker from Liberum. Apologies, I'm actually going to ask 4 questions. First of all, just in terms of data investment management, I mean, that's been an area sort of where recovery's been talked about for a long time, but it's never come.

I guess the question is, is it time now for maybe you to exit that business? It's not something that your peers have sort of in a substantial amount. The second thing is just in terms of digital. I think you said that the revenue growth in digital first 9 months was 2%.

The slide, when you look to the top 5 online providers suggests billings were up 23%. That would suggest that essentially the long tail of digital is seeing a decline. Just wondered if you could talk about what the implications sort are of that, just in terms of the drag effect that you would have in terms of '18 revenues and beyond on the business.

The third thing, just in terms of the margin guidance and the withdrawal, the sort of scaling back of that. So that had been talked about before that essentially, you thought you have enough protection for 2017 to keep that 30 bps of margin increase.

Just wondering what exactly has changed here so that, is it that you're more concerned about ad hoc project work in Q4, which is something that Interpublic has mentioned.

Is it that something has changed in terms of dynamics sort of in Xaxis [indiscernible] digital? Or is it something else which is happening? And then, finally, just in -- sort of from a more longer-term perspective.

So if you went through the sort of perceived threats of sort of analyst [indiscernible] in terms of the threat to the agency business, which is a great explanation.

I guess, the sort of question I would have, though, is the -- that's all fine, but what exactly can you do to actually get your growth going again? Because it sounded very much from those charts as though this is very much as though you'd have to wait for others to come back.

If for example, you were to look at the broadcasting sector, they've taken steps to actually diversify their revenue streams away from TV ad revenues.

Is there anything that you can sort of from your side to maybe change your business model to actually sort help your revenue grow?.

Okay. So a lot there. Let me deal with the last one first and then maybe Paul can talk a little bit about margin protection. I'll try and talk about digital and digital growth. And then, lastly, I'll try and talk a little bit about the data side of the business. What we tried, Ian, to point out is what we can do.

And if we look at the 4 things that we focused on, certainly, integrating our offer, making it more seamless -- I mean, clients I don't think worry, as I tried to point out, as to where each participant in the team, whether it covered advertising or media or public relations or data, however they -- they don't care whether they come from.

What they want is the best people working on their business. So that's one thing. You pointed to the comparison to broadcasting companies. Well, the analogy to us would be geographical growth, finding the pockets of geographical growth.

And I think if you look at where, again, where the next billion consumers would come from or the next hundreds of millions of consumers are going to come, they're not going to come from the U.S. or Western Europe, whether U.K. is in Western Europe or not. So they're going to come from Asia. They're going to come from Latin America.

They're going to come from Africa and Middle East and the Central and Eastern Europe. And it may well be also that the companies of the future come from those regions as well. So I think the geographical bucket is another bucket. The digital bucket, which again, we've tried to emphasize, is also an area where we do see significant opportunity.

We've tried in those brief statistics on Wunderman, on VML, on GroupM, to show where we do collide in the digital area. And obviously, broadening our digital offer can help that to. On the data piece, which is related to your first question, we think data is an important determinant. I mean, I look at the public relations and public affairs business.

That has been changed to some extent, some might say to a dramatic extent, by the rise of social, by the rise of search and last but not least, by the rise of data.

So in every one of those areas, whether it is integrating the offer in those higher-growth areas of client development, whether it's the geographical opportunities, whether it's the digital opportunities or the data opportunities, I think we have an opportunity.

Maybe as we've got Mark and, I hope, Jon Cook on the line as well, I could just ask Mark talk a little bit about how you see developing Wunderman's digital offer, particularly in relation to the consultancies that we've outlined you competed against. .

I mean, I think, look, where [indiscernible] that's the most competitive with the consulting firms, along with VML. We could see this more in the U.S. and the U.K. than we do in the rest of the world, probably where we're the most advanced in that area.

And we've been investing heavily the last 2 years, both in terms of sort of acquisition, and as Martin said, realignment, as Salmon's coming into Wunderman, the whole Wunderman commerce acquisitions that we made, like Pierry, which specializes in Salesforce; or Cognifide, which specializes in Adobe, of growing out the technology part of our business and then really integrating that technology with what we would traditionally do from a marketing perspective.

We think Wunderman -- we grew up from a direct marketing background, integrating that technology with what we deliver to clients. As I think about it, we sort of compete with consultants, I guess, in 3 areas creatively.

And if you look at the list, the areas on the creative space, that's the one where we lost the creative work to Heat, which is an ad agency with Deloitte; or one with sort of more technology part of the business that in partnership with [indiscernible] 6 on the media, digital analytics functions, sort of when read the wrong way.

The second area will be sort of technology, sort of Martin-led technology programs, where I'd say on average, we win our fair share.

And then it will be sort of technology-led transformation programs, where the marketing element is smaller, the client tends to be the CIO, and where we do win programs, Salmon or ones in commerce as we're platforming or 2 or 3 major retailers in the U.K. And they'd beat Accenture and Deloitte Digital against those assignments.

I mean, to give you some context, if you all up -- looking at the Wunderman numbers on that chart, there's about $20 million of revenue that we won against consulting firms. We need to win roughly $100 million of revenue a year to make our numbers because we have projects that stop and sadly, we do sometimes lose clients as well.

So we need to win roughly about $100 million of those revenues. So we see consultants on that basis about 20% of the pitches that we win. So I'd say they are increasingly competitive, but there are definitely ways that we can beat them.

And I think if you can see the steps that they're taking, they're looking at the same opportunities that we're looking at and saying, well, actually to be successful with technology in their programs, we need to have a greater understanding of the consumer. We need to have a greater understanding of marketers.

We usually have to talk to CMOs, so that's why they're shifting in that direction. Why they buy creative agencies or advertising agencies, that will be a question you have to ask them. That doesn't seem to make a lot of sense, at least to me. But I do understand the competitive dynamic driving them to buy the market-led customer experience agencies. .

Mark, can I add to that? This is Jon. .

Yes, go ahead. .

Yes, I would -- this is Jon speaking from VML. And I would second everything that Mark said. We're also seeing on the front lines of competing in this -- in the world of consultancies. And where we've had success, I believe it's similar to Wunderman even if at a bit different flavor. But it's the idea of a connected consumer experience.

And the big difference we've seen that we've been victorious, which has been often, has been the context of things like creativity, social media, data and commerce. Whereas in those competitions sometimes from the consultancy side, you see that as an add-on or an adjunct part of the expression.

The idea of placing creativity in the right place, data in the right place, commerce and social media in the right place in the connected consumer experience has been a big advantage point. And the second advantage point that we've seen from a VML perspective, I think Wunderman would say the same thing, is that the globalization of creativity.

A lot of the acquisitions on the consultancy side have been creative organizations, like some that Mark mentioned, but they've been regional in nature. And we've seen a big advantage in the global scale that we've built with WPP for globalizing creativity and messaging.

The integration of the connected consumer experience and the globalization of creativity have been 2 major ways that we've seen an advantage. .

Okay. Paul, do you want to just talk a little bit about margin and forecast for the year and margin protection? Ian raised the question about why, if we're flat in terms of the top line or down a little bit, we're so cautious on the margin. .

Well, I think partly, it's because our businesses are feeling cautious, having seen what they've experienced in quarter 3 and quarter 2, to a degree. So if you sort of stand right back from it, our 2 higher-margin regions are the U.S.A. and Asia Pacific, and both have a certain degree of challenges.

In the third quarter, although we did, I think, better than people generally expected, we didn't do as well as we had forecast ourselves in quarter 3. And the cost savings that we have achieved, that basically had to go against the revenue slippage as opposed to sort of come through in terms of incremental conversion.

So incentives are taking some of the strain already. And I think it's sort of -- we're trying to give you a realistic view of how we feel things are going.

What I would say is it's not, in my opinion, anything to do with the mix of our business between, let's say, the digital platforms or the media businesses, which actually have been very robust in terms of their profitability and performance.

The research businesses, which have been very robust and sort of their profitability and performance, is more sort of our traditional businesses with the larger networks that have issues in certain markets, where they're finding it challenging to adjust the cost quickly enough.

So I think they're being cautious about the expectation of flow-through revenues in the fourth quarter. I think it's our best view of where -- of how it's going to come out. Of all the categories of spend, staff costs are well controlled. Property's being well controlled. The old -- so are travel and commercial.

The only area of business investment is in IT. And obviously, we also have had the malware attack where we had to make some additional sort of short-term investments to recover from that situation. But actually, investing behind the digital businesses is not something we are pulling back from. So that goes across the group.

And yes, you mentioned -- as we mentioned, it's around 5 billion of revenues in this quarter. So Wunderman, for example, GroupM, Kantar do have significant investment programs in their various platforms to continue to provide the growth. So it's not about our digital media buying or our media businesses fading profitability.

It's more about the mix of regions and the caution that we see having had 2 quarters where we haven't met our expectations, but being cautious about the fourth quarter. .

Just Ian, coming to your point about digital. I mean, I -- the digital billings growth referred to in relation to '17, covers -- I think it's 5. It's not just Google and Facebook. It's Amazon. It's Twitter, and it's Snap as well. So I think that explains -- you've got to look at it, not just as being Google and Facebook, but those 5 as a whole.

And I think what those figures demonstrate is the pressures that we've seen. I think Unilever, in its first half numbers, I think, said that it'd taken down agency fees by something like 17%. We have not seen that degradation in relation to our relationship. But we have seen significant cuts, not just in that case, but across the whole FMCG area.

That's 30% of our business, and it has affected not just traditional, but digital as well. So I think it's wholly consistent with that. And I don't think you can read anything into it if, in terms of what's happening, for the long tail or the short tail.

What I would also add is that given the pressures that we've seen, whether it be political brand safety, consumer brand safety, the Russian investigation or the Russian connections; the value, validation, viewability issues surrounding the 3Vs, surrounding Facebook and Google, what we have seen, I think, is increasing examination of spending, particularly by the short tail on Google and Facebook.

I don't think that has dramatically influenced the growth rate. If I remember rightly, Google's 9-month revenue increase was about 21%. I don't think Facebook have reported their increase, or I can't remember what it was, for the first 3 quarters. But I think the growth rate is even stronger than we've seen at Google.

I think, to some extent, what's been happening is that the long tail has probably been growing faster. Let's call it the garage or the corner florist has been increasing search spending and social spending to a far greater degree and using the creative services of Facebook and Google to do that.

And I don't know whether -- maybe just before or after I'd just come back to the data question you raised, maybe Mark and maybe Brian Gleason actually can comment on digital spending as a whole.

But on data, we were intrigued to see the Ipsos figures in -- for the last quarter showing significant growth of 4% in the -- what is essentially a custom business.

And as we've said to you before, Ian, of the 4.5 billion, whatever it is, of revenue at Kantar, 1/2 is roughly in custom and 1/2 is in what we would call panel or continuous or semicontinuous business.

The panel part of the business, pretty much in developed markets and developing markets, has been stronger than the custom business in both developed and fast, so-called fast growth markets. And the pressure on custom has been particularly great in the more mature market.

Certainly, the -- I would not -- I mean, just asking -- answering your question very directly, I would not want to give up access to our panel business, both in mature and fast-growth markets. Neither would I want to give up access to our custom business certainly, in the fast-growth market.

The mature markets obviously make it more difficult, and that's we're getting the most significant pressure. There are some differences to that, in the U.K, for example. We continue to do pretty well across the whole of the business, whether it's panel or custom. So it's not, you said -- used the word, exit.

Exiting the business is not something that I think, we think, from a strategic point of view, makes a lot of sense, particularly when you're trying to differentiate your offer in a meaningful way from the competition, certainly, from the direct competition.

And emphasis on return on investment, given what we said about cost and consultants having a go at costs, return on investment becomes even more important.

And in terms of differentiating our media agencies, which is another quarter of our business as a whole, differentiating them in a meaningful way, we think, means that if anything, we have to integrate our offer more importantly. So when you use the word exit, I wouldn't use the word exit.

I would be very keen to find ways where we can leverage what we have in the data business more effectively.

And Brian Gleason, do you want to add anything on digital, digital spending, what you're seeing at Google and Facebook and indeed, others?.

Sure. To echo the point on horizontality and leveraging data, one of the points that Martin mentioned was leveraging our data asset. So mPLATFORM, which is our data and activation platform for GroupM, we brought that out to roughly 200 clients now.

And one of the key differentiators in every conversation is our ability to link our asset to Kantar and something like Lightspeed. So as that platform progresses, I think you'll see true, true benefits that we're able to bring to the surface.

In terms of digital in general, obviously, our relationship with Google, Facebook and others continues to strengthen.

One of the things that we look to in the marketplace right now is, how do we build the best available partnerships with each one of these platforms? And how do we bring the greatest level of value that we possibly can? It's different for every client, the way that we engage with them.

It's different in every market in the way that we engage with them.

But we've been, in terms of Google, pleased with how that relationship continues to progress, whether it be with utilizing best practices across our search activity and partnering with them, whether it be with unique integrations with our platform to make sure that our audiences -- we match our audience into a Google Environment.

And the same is true with Amazon, which I know wasn't listed. But that's certainly an area that we see a tremendous amount of interest in as we think about e-commerce and retail. Facebook, a little bit more distant in terms of where our relationship is right now from an integration standpoint.

But we continue to move down that path and look for points of intersection where we think we can create value. .

Yes, I just want to add to Ian's question, the one other thing in relation to data. I think one other things that our clients are increasingly concerned about is their ability to control the data, particularly in relation to what Brian just mentioned in relation to Amazon and Alibaba.

And they're seeking to find ways of influencing or controlling much more effectively. I think, given the pressures that Google and Facebook are facing in brand safety, the political area, et cetera, they are becoming more responsive to the need to share data.

Whether that is true of Amazon or, indeed, Alibaba in the longer run, is a question that is very much top of mind for our clients. And so coming back to the data and, again, using the word that Ian used, which was exit, it makes little sense to exit if that is going to become more and more important.

So I think data and control of data and influence will become more, not less important.

Want to move on, Paul, from Ian's 4 questions?.

It's Patrick Wellington, Morgan Stanley. Just 2 questions. The one for Paul. Paul, the debt has gone up by about GBP 1 billion between the end of June and the end of September. From my count, which is not normally that accurate, I think GBP 270 million of that is acquisitions and share buyback.

Can you say what the rest is and what the effect is of the India sales tax and the cyber-attack? And how much of that you'll get back while you're doing that? And for Martin, we've dropped the margin target. What about the long-term target, which are 10% to 15% earnings growth. I don't think you're going to do that in 2017.

It's very possible you won't do it in 2018.

So what point does one switch these long-term targets? Or do you just keep repeating them irrespective of the ability to do it in the short term?.

Okay. So why don't I start off with the working capital. So the average net debt is around GBP 500 million worse than it was a year ago. That's really the effect of the spend being greater than the cash generation over the last 2 years.

So I would expect that our point-to-point difference is very similar to our average difference, which it was in June, but is not in September. And there are a number of factors that have sort of gone against us in the quarter, I think. One, the malware attack and the Goods and Services Tax in India have been quite significant one.

India was actually hard hit by the malware attack. We had all our systems down in India for the best part of probably 2 to 3 weeks. As I mentioned, then you had the Goods and Services Tax. It delayed our billing by really up to close to 2 months. It is around $125 million per month.

So we're definitely, I think, $200 million behind in our India market in terms of collections. So that's one factor. We did an estimation of what it was in Europe. Around the end of June, recall, it's 100 million. Most of that should have been collected by now, to be quite frank with you.

The other factor is whilst we're using a balance sheet, so our cash position is about 100 million, 150 million better than you would look in terms of the cash flow sort of point to point. The first factor, which is very difficult to explain, is when I look at the working capital. I know where I am in terms of trade working capital.

And we had a very good significant improvement a year ago of around GBP 300 million to GBP 400 million. To a degree, we have not improved upon that.

So when I look at all the clients that we have and the terms of trade we have with them, they have not deteriorated, but we haven't been able to make a further improvement in the working capital since we made the improvement a year ago.

And then the final piece, which is unfortunately significant, is in the nontrade debits and credits and provisions and other items. We seem to be around 250 million to 300 million worse than we were a year ago. That has traditionally reversed by the year-end. It's small, sundry revisions. None are above $10 million. It's nontrade in nature.

It's like tacticals and verified provisions. So they are quite a significant element to the difference. My intention is that point-to-point at any one time should be very similar to what the averages [indiscernible]. So if we are GBP 500 million on average difference on net debt, that's where the point-to-point should be.

So we are expecting the India one to recover by the end of the year. The balance sheet and the cash differences also gets corrected by the end of the year. The trade one, it's been a very good, I'll say, 6 months of the year, less good last 3 months. So that's part of the reversal that we're incurring.

And I'll say cash outflow has been around 280 million, as we mentioned. .

[indiscernible].

The top end, yes. .

There's the piranhas that are built on high-volume growth and no profitability. And there's the piranhas that are built on sort of reasonable volume growth with significant profitability.

Let's call them the Chinese, Indian, Brazilian, Russian, whatever local competitors of long-term standing as opposed to short-term sort of ramp-up driven, let's say, by digital growth. So to compete with any and every one of those, I think our clients are going to have to invest more. They're not going to be able to cut their way to growth.

So at some point in time, if you accept the analysis that we laid out, that it's not Facebook and Google, that it's not consulting digital, it's more consulting cost, and it's the distortion caused by low interest rate, at some point in time, we think that reverses. .

Julien Roche with Barclays. The first question is on Q4. To be flat, if you use 0 for flat, you need to be up 2.1 in Q4, which is a 3.2 improvement versus Q3. Now the comps are 0.7 easier. So you kind of have a 2.5 gap. Where is that coming from? I know there's some benefit of account losses cycling, if you could quantify that.

But if you could give us more color on why Q4 is going to improve? That's my first question. My second question is a follow-up on Patrick's on margin. Basically, your answer was if the top line stays there, we're going to have to work harder at integrating, simplifying, so lots of work for Paul and other people.

You gave us one number in the last couple of years, which was 100 basis points of 2, 3 years from IT. Your preliminary assessment of the kind of simplifying cost-cutting [indiscernible].

Are we talking about another 100, another 200, another 300 to have a sense of what the margin can do if there's no growth for the next 2 years? And then the last question is on the lack of growth. So I accept all your explanation, not digital disintermediation, not consultant. It's pressure from clients.

And your answer is at one point that I'll have to reinvest. The issue is that you have working media and nonworking media and you can invest in working media and continue to cut in nonworking media for a while. So why will that not happen for the foreseeable future? What's going to make them invest more in nonworking? Those are the 3 questions. .

Well, I think, well, let's just deal with the third one first. If you're not getting the volume growth, what do you do? And if the number of users of your product is declining or not growing sufficiently, what do you do? I mean, I posed that question. That's number one. Number two, if -- you might be able to make onetime cuts.

Whether you can -- you continuously cut costs by the same amount every year, I don't think you can do that. There is a limit to what you can do. You can't -- one line in our release is you can't cut your way to prosperity consistently. At some point in time, you're going to have to invest.

I mean, the irony of what you just said is that in the U.K., where there are high levels of uncertainty, we're seeing about the strongest growth not everywhere, but one of the highest growth markets. Why is that? Well, that's perversely because there's so much uncertainty. I don't think clients are investing in plant and equipment.

They're investing in variable spend on the top line to gin up, to tick up the top line growth. So I mean, it's a reverse of what we're seeing elsewhere. And the irony is, it's in a world of increased uncertainty where people, in order to get some growth, are investing in variable marketing spend.

So I just -- I think at a point in time, the chickens are going to come home to roost.

I mean, there are several companies that have pursued cost-based strategies, where analysts who follow those companies are raising the question about how you get top line growth or otherwise, it just becomes a downward spiral in terms of volumes, getting lower and lower. Now you mentioned working and nonworking.

You might be able to cut it, whatever that means. I'm not quite sure. I mean, that's a loosely used term, and I'm not quite sure what determines what is working and what is nonworking. But let's assume for the moment that in the first 1 or 2 years of this cycle or this part of the cycle, you cut out your nonworking.

Does that mean everything is nonworking? Do you go to 0? Or have you eliminated the nonworking? At some point in time, you're going to have to invest in the working part as well to maintain it. On -- Paul may have some observations on what more can be done on the back office.

I wouldn't want to give you a figure, another 100 basis points or 200 or 300 that you mentioned at this stage. But I think what we have to do is given the situation that we face and the pressures that we face, we have no choice but to look at our back office in a more revolutionary way, just in exactly the same way as our clients are doing it.

We will have to, to use your phraseology, look at our working cost and our nonworking cost and try and eliminate as much of the nonworking cost as we possibly can by eliminating the duplication.

I mean, do you want to add any more on the back office, Paul?.

No, I think we'd actually like to go faster because quite frankly we now have a plan of action that is now taking in stages the 6 major markets, including countries like China and India, and then moving on to the big decision on North America that has to do with how we've been very efficient in outsourcing.

So we've kind of got 2 models in plan or in place. One is the centralization of our back offices [indiscernible] and getting efficiencies for centralization. The second, which actually Kantar have adopted the most aggressively is outsourcing directly to a third party, such as Genpact with guaranteed savings.

What I would say is, yes, there is more we'd like to and we'd like to go faster and now we're proving it to be successful, both on the IT.

We've got a shortened time line to -- in very simple terms, move all our data centers into the 4 global data center support of IBM, and we have a time line for the next 24 months, which we have to achieve, partly through the security initiatives that we've got and partly because actually, it's how we get our efficiencies the quickest.

On the finance side, as I said, we are working through it. We'd like to go faster. Now we've got a proven model. But I also think it's -- there is some of the front-office side that helps as well. So if you take the combination of the Health & Wellness businesses, we're basically going to have once a year for what was previously 3 businesses.

And that has actually already taken place. We're going to have -- we're not going to need 3 CFOs of the same skill that we have before when they were running independent businesses. We're going to have one CFO and other controllers.

So I think there is a rationalization that's going to happen across the more traditional network as they simplify the businesses. So it's not just going to come from the back office area that we are identifying. On Q4, actually, your numbers aren't exactly right, but they're close. So Q4, I think, is around 28% of the group's revenue.

I think we are relying on -- we've had a good performance in certain elements of business in quarter 3 but by no means all. So I think it does depend a little bit on how much of this as yet always unascertained projects come in the fourth quarter. What I would say is we've been very conservative in how we forecast today.

Yes, it does require a little bit of improvement coming through in the U.S.A. and Asia Pacific in order to get the numbers going. Europe seems to be more steady, albeit though it's a lower margin business than the other 2. So it is coming through in a very disciplined.

Our media business is beginning to perform and cycle through some of issues they've had. Our data investment management business is more optimistic about the fourth quarter, et cetera, et cetera.

So it's really -- from the run rate, from the comparative and from the regional momentum we've seen in other markets that we're basing our approach on a sort of broadly flat revenue numbers. Again, we did forecast 2% at the beginning of the year. It's a long way down from that. And so we hope we're right in our estimation for the fourth quarter. .

Yes, now just to add to that, the new business record in the first 9 months has been reasonably good. And that would -- should start to kick in as we go into the fourth quarter. And then the other point is that we start to cycle, I mean, the 2 principal losses that we had last year were AT&T, which started, I think it was in November.

The loss was triggered, I think, in November of last year. VW, it really impacted from January 1 of this year. So we start to cycle out of the comparatives in a way get easier as we go into Q4. .

It's Lisa Yang from Goldman. The first question is on the client spend. I mean, a few of your, actually clients in this [IT] space have been talking about increasing their spend in the second half.

Is it something that you have seen already or you expect that to happen in Q4? Or are they reinvesting, but not going through the agencies? That's the first question. Second one is on your balance sheet. It now comes towards the upper end of your target range of the financial leverage.

So just wondering, given it will be quite a good use of cash to buy back shares or do M&A, whether you would consider to be selling some of your stake to give yourself more headroom for that? And lastly is on Zaxus. Is it possible to have a growth number for Q3 in terms of bidding? I think in the first half, it was up 10.

And given all the transparency concerns in U.S.

I mean, is there any kind of strategic repositioning to be done to get around all those transparency concerns?.

Okay. On client spend, I'll ask Brian to comment on Zaxus. I think for the year, we've indicated that globally, Zaxus would do about 10% in terms of increase of billings on a global basis. But Brian can talk to what's happening on a U.S. basis. On client spend, I think there has been talk, Lisa, that there would be increased spend.

If you look at our Q3 being a little bit, but I wouldn't say it's been pronounced. And we'll have to see what happens as we go into Q4 as well and start to look at next year as well. In terms of selling stakes, I mean, we would only sell stakes if we thought it was the right time to do so or rather than where we had to do so to reduce leverage.

We are at the, as you say, at the top end of our range of 1.5x to 2x EBITDA. And -- but the cash flow of the business is strong and will improve given the comments that Paul made in relation to the net debt position as of September 30 and the impact of the cyber-attack and the GST in India.

So I think in answer to selling stakes, we would sell if we thought it was the right time to do so rather than be a forced seller. Do you want to add any more on Zaxus, Brian, and particularly, the situation in the U.S.

with respect to transparency?.

Sure. So Zaxus, we continue to pace high single digits to, as Martin mentioned, 10% growth for the year. And in the U.S, particularly, we've had last month, the month of September globally was the best month we've had for the year and continues to pace well.

In terms of diversification of the portfolio, just to give you an idea where we're going, in the U.S., the transparency in the ANA, which I think was almost 15 months ago, it was less than 5 clients who pulled out of Zaxus in the U.S. Where the U.S. where we've seen globally as well, the business continue to evolve is around outcome-based meeting.

So we're running AI or artificial intelligence on nearly 40% of our campaign. And the ability to drive top line results is the singular focus for Zaxus. At the same time, we diversified the portfolio in the U.S.

about where we've introduced a new product or a new media product called [indiscernible], which came out of EMEA, which is our native offering. That is -- has significant growth in the U.S. and will continue to evolve our product offering as well. But overall, based off platform is where we continue to pace [indiscernible]. .

I mean, I'd just point out one point, maybe you can amplify this, Brian. One of the things we've noticed, coming back to the focus on cost, is that some clients took a view on the so-called nondisclosed model. Just to be quite clear, we -- Zaxus operates on an opt-in model where the buy price is not disclosed.

But everybody is clear that we're acting as principal and that, that buy price is not disclosed because although the client, of course, knows the price which he pays, he or she pays for the inventory.

So one of the interesting things, I think, is happening is this, is that whereas, let's say, 12 months ago, clients might have taken the view that, that model was not right for them, their business units and their business divisions are under such pressure for performance that if you can demonstrate that Zaxus or indeed, any other disclosed alternative, opt-in alternative is more effective, then the client's business units would suggest to the center that, that might be an extremely effective way of improving efficiency and performance and reducing costs.

I mean, do you want to say anything, Brian, about -- without being on specific clients as to what -- whether you see that as a trend?.

Absolutely. I mean, I think you see the number we probably in the past is on average Zaxus is driving efficiency of roughly 25%, if we compare to other models in the marketplace. So we've seen clients come back to that model as they've gone or attempted to use other things.

Obviously, that 25% efficiency shows up very, very quickly in our other media spend. The same is true across all of our portfolio. As I mentioned, Mark mentioned Triad before. So Triad driving eCommerce or retail revenue in-store is a direct correlation to media spend. So we're able to show return on ad spend, $1 equals X.

And that is the entire focus of our meeting product. So we've seen, I think, to Mark's point, 2 or 3 clients actually move back into Zaxus that previously hadn't been clients that have been long-standing by WPP relationship. .

Charles Bedouelle from Exane BNP Paribas. I've got actually 2 questions. The first one is on the digital growth because we've heard Zaxus kind of coming back. We've heard the [indiscernible] doing well. We see that you did 23% with the top 5 guide on the gross billing. But the digital is up 2% to 3%.

So can you maybe explain where is the digital suffering or repositioning? That's the first question. And the second question, just kind of housekeeping.

Paul, what do you think will be the associate contribution or increased contribution on a full year basis so that we can have many of the underlying, kind of margin target for this year at this stage?.

Do you want to address the housekeeping question, Paul?.

No. Not quite yet. .

Right. I mean, on digital, I think, Charles, the answer to your question is sort of a similar to Ian's question is that we're seeing a pressure on cost across the board. And I don't think you can discriminate at the end of the day between what you see happening traditionally or what you see happening in the digital part of the business.

If the digital part of our business is 40% of our revenues, if it's 30% of the market, which, what appears to be the market, the cost pressure is applied to both. And the concerns around brand safety and viewability and measurability are similar. I mean, I'll ask Mark and maybe John to comment on what they see on pricing.

Do they see clients willing to commit to digital programs willy-nilly without looking at cost at all? Do they see clients being indiscriminate on the cost side on digital whereas on the traditional side, they see them being more -- more efficiency driven? I mean, Mark, do you want to comment on that on pricing?.

Yes. I mean, I think the answer is no. I mean, whilst we're probably in the bit of the business the clients want the most of, there's still pressure on pricing. There's still pressure on cost. They're still going through your detail if you still spend 2 months negotiating the scope of work on the contract and the pricing.

So procurement department heavily involved -- as heavily involved as they are in other parts of the business. So I think that directionally, we face some of the same headwinds from a cost perspective, although probably we've seen tailwinds from a kind of overall demand perspective. But there's no difference.

John?.

John, do you want to add?.

I concur. I think where there's no difference in -- especially when it comes to content, it's about content creation, about the efficiency of creating that content and that storytelling and getting that word out. And there's not a discrimination between whether that content lives in traditional media or digital media.

It's similar pressure, and I agree with Mark. .

I mean, the only area, to be fair, I think Charles that you see less discriminatory pricing is probably the highest growth areas.

And just going back to the S&P 500 analysis, if you focus just purely on the tech side, you probably would see the growth rates are so strong in that particular example, 4x what you see in packaged goods, the likelihood is that the tech clients are going to be more concerned about implementation than they are about pricing, that the growth rates are so strong that they're more concerned about getting things done than arguing about the cost of which they get done.

Are you ready for your housekeeping, Paul?.

So last year, just to remind people, we did GBP 46 million income from associates. At the half year, sorry, that's -- this is the half year number. We did GBP 46 million in the half year. We're looking at around GBP 90 million on a full year basis. That is considered to be stronger than last year's number, GBP 65 million.

And part of it, if you remember, we won a big business with Haworth at the beginning of this year that is a big contributor to the associate income change and we have done considerably better in some of the Kantar associates. So net-net, we'll be around GBP 90 million this year versus GBP 65 million last year, double the half year run rate. .

It's Richard Eary from UBS. Just 3 questions. Just obviously to get back to the margin question again, unfortunately.

Just if we go into '18 and if we do get a repeat of '17, where we get a flat growth environment, I mean, can we get a view that given the cost-saving initiatives that Paul, you talked about and both Martin and you talked about, can we get a situation where we can deliver a flat margin target in '18? So that's the first question.

The second question just comes to, if you look at the advertising and media business, and you look at the direct costs, i.e., between the gross revenues and net revenues in the third quarter, it seems as though that direct costs actually fell year-on-year after being up quite strongly in Q1 and Q2.

I'm just trying to get an understanding of what happened within that and whether there's any mix issues that we should be aware of. And then the last question just on client wins.

I think you actually put in the deck, obviously, the announcements of the losses in October, the ABI and Lionsgate that take sort of in net billings about GBP 5 billion year-to-date.

How do we think about like contribution in terms of revenue growth into '18?.

I mean, on the client wins, I think we're early on in the process to give you a view as to where we'll end up on revenues or revenue budgets for next year. So I mean, I think you look at it as being net-net a tailwind. Obviously, when you refer to specific accounts, the specific terms on each of those accounts are particularly important.

And in fact, if they're losses, the terms on which you operated on the historically is important, too. So I would say on the client wins or the net win position for this year going into next year, it's early to estimate what that impact would be.

On mix, I mean, do you want to comment on mix, Paul?.

Yes, it is really difficult to analyze for you, actually, because the direct cost of combination are 2 things. And actually, I did pull the numbers out. So the half -- the quarter is GBP 460 million combined between the media businesses, which is principally Zaxus and platforms acting as principal, not solely, but principally that.

And the Kantar direct cost for field research. And actually, on the 9 months, it's GBP 1.5 billion. So we're kind of running at around GBP 500 million for the quarter, and that hasn't really changed.

That is the interrelationship between the growth of Zaxus, which you've heard from Brian, is doing well, versus the spend in the field force numbers, which tend to say correct or say, the projects tend to be completed for the half year.

So what you tend to find, what we've noted, is quarter 1 and quarter 3, there's a differentiation that widens between revenue and net sales that closes quarter 2 and quarter 4 at the same time as many of the continuous tracking project get completed and delivered to client. That's probably the best explanation I can give you.

So it's running around GBP 0.5 million per quarter. That's been a consistent rate. It then depends on really the speed at which Zaxus is implemented in other markets. For example, now it's doing very well in Latin America. That will probably distort fractionally the relationship between revenue and net sales in Latin America.

That's probably the newest market. It's a small base, but it will grow strongly. So those interrelationships that are really difficult to predict, but they tend to self-correct in quarter 2 and quarter 4. They tend to be more out of alignment in quarter 1 and quarter 3, partly due to the [indiscernible]. .

Just going back to the first question, which I think if I heard it right was, if your revenues are flat or our revenues are flat next year or net sales are flat next year, do you think we can deliver flat margins? Was that the question?.

Yes, that's correct, Martin. .

Okay. Well, I think the answer is we've always felt that we had 2 years flexibility in the event of revenue slowdown. So if we came -- let me put it like this. If we having done the budgets, felt -- came to the conclusion that flat revenues were again going to be the situation for next year, we would be focused very much on flat margins.

In fact, we would be calling for our business units to be trying to improve their margins in that context. But overall, to answer your question head-on, we will be looking for at least flat margins for next year. .

Tom Singlehurst from Citigroup. 2 questions. One is [indiscernible], just trying to work out whether no deal is better than a bad deal in terms of the proposed transaction there. And then, secondly, on the change in remuneration. You talk about half of remuneration being linked to overall good performance.

I was trying to work out whether that's a good thing or not. I can see it obviously helps cross-selling. But at the same time, it does mean your highly talented staff in fast-growing areas get dragged down by it not perhaps doing as well. .

Yes, I mean, on that last question, I mean, we have to get used to the fact that -- and by the way, that 1/2 of the group incentives being tied to overall performance is not new. And when we scaled it up, it was, I think, 1/6, then 1/3 and then 1/2 over 3 years. I think it's been operating for at least a couple of years.

I mean, we have to get everybody attuned to the fact that we're trying to get the company to think as one instead of a myriad of different atoms. And that realization to -- again, to answer your question head-on, I think it's critically important. There may be better ways of achieving it. You said, Tom, to achieve cross-selling. It's not cross-selling.

It's to achieve a situation where, I mean, for example, one client and this is one of a significant number, have said to us they don't want to deal with multiple P&Ls. .

Why don't we take another question and then we'll come back to Martin. I'm sure they'll be a second here to get reconnected. If there's another question, let me try and deal with that.

Have we lost the mic as well?.

So it's Matthew Walker from Credit Suisse. 2 questions please. The first one is on -- going back to transparency. It sounded like [indiscernible] not that worried -- you're not that worried about transparency. But U.S. was down really heavily in Q3.

If you're being like totally honest about it, how much of Paul's group's profit, not that you aren't always, obviously -- how much of the group's profit are at risk from people doing things like tightening up media clauses and contracts to eliminate unearned income, all sorts of further contract, all that kind of stuff.

What percentage of the group's revenue -- profit is at risk from people tightening up on those things? The second question is, you raised a really interesting point when you're talking about Facebook and Google in the statement, it also raised an interesting point about the platforms, the big platforms, the tech companies in China.

If you look at what's happening in China, advertising revenue has grown reasonably strongly, but the group's revenue has not kept pace at all with that [indiscernible]. You're also saying that some of the platforms in China, maybe clients are going much more direct.

And given your investment in China and how important it is for you for the future, what can you say about the prospects for China? Why are people perhaps potentially going direct to Tencent, et cetera, in a way that they don't do for the U.S.

thing?.

So let me just start on the transparency answer and maybe Brian can help in a second. So whilst the ANA report came out, I think what we said at the time and certainly it's old news if you go right back in time, one, we have a higher degree of multinational clients than any of our competition.

The issue really surfaced in 2000, went into public, came out after Eliot Spitzer made an issue on speaker commissions in the insurance industry. Then the public came out with a hit of around GBP 250 million for not honoring the full terms of the client contract.

So ever since 2000 and then certainly, with the advancement of soft and other legislation in the U.K. and U.S.A., there has been full transparency with our clients on all forms of media, rebates, incomes, et cetera, earned. That gets audited repeatedly at -- by third-party auditors around the group.

So whilst there has been a lot of noise around transparency and if you do read the ANA report, it is a lot of hearsay about what used to happen in industry and executives that are no longer in the industry.

It has not had an effect in terms of our returns nor our, I'd say, transparency with clients about the information they have received in the past from us. So it has not had a change in our relationship with them in terms of fees earned and total return versus what media owners pay us. So that's my view of the situation.

And whilst there was a lot of noise, actually of all the markets that doesn't have any rebates at all, is the U.S.A. So what was clearly was an issue is a lot of the industry started [indiscernible] client side had difficult to believe that we could act in their best interest when we're acting as principal.

Clearly, it was saving 25% to 30% on the ultimate media costs, that is a saving worth having. I think it was more about the debate about should we as agents, on their behalf, have a part of our business access principal.

And that issue, I think, as Brian has mentioned, is being resolved as some of our top 20 clients are returning to us using the Zaxus products.

So the whole transparency debate, while it surfaced in publication sort of 15 months ago, it has been a steady journey since 2000 for the holding company to be fully transparent with all their clients about all media income earned.

So the second part of the -- unless you want to comment, Brian, further on that? Yes the second part of the question, I hate to summarize it, Matthew, is really talking about China, Martin, and in terms of well, there's been good growth in the technology companies in China. We have not seen a stronger growth in our businesses there.

And there has been, I suppose, comment around some of the smaller and -- well, not so much smaller, local client going more directly in China using Alibaba, Tencent than traditional clients have done in the west with Google and Facebook and is there anything you can say about that?.

Are we back on yet?.

You are now back on. .

Okay. Fine. Okay. So just coming back to China for a minute. I think the issues that we faced in China, particularly in the last couple of years, have been twofold. Firstly, around media broking and our unwillingness to use media broking.

And we've certainly made begin roads, particularly in the last 2 or 3 quarters, for example, in the Chinese auto business in pricing. And ironically in relation to the first part or the first question, transparency in the Chinese market. So that will be one thing.

And the second thing is our data business in China has been under significant pressure, also primarily in the auto category. But I think that has been one of the reasons. But I think we've seen a little bit of a lift in that area as well.

But I think, principally, the Chinese GDP growth rate of 6%, 6.5% has not translated into packaged goods or consumer goods or multinationals in China. If you look at the results of the major multinational companies in China, they've been under pressure too for exactly the same period that we've seen, the last 2 or 3 years.

So my view is it's not so much of -- we do acknowledge in the statement that the rise of Alibaba and Tencent have probably had more of an impact in the sort of Google and Facebook category question than in the cases of Google and Facebook. Coming back to the U.S. transparency issue. I mean, Paul, I think answered it very well.

We have not seen that impact. What the impact has been to cast suspicion and innuendo, not fact. In the reports that the ANA issued, we have to say yet again, there is no specific case given whatsoever, none. And I think our competitors have referred to, and we have referred to, increased audit activity.

But the question was, if we are totally honest about it. Well, we are being totally honest about it. And we are saying that the U.S. business, as Paul said, is not a -- it's not a rebate market. It's the one market in the world probably or one of the markets in the world where that is not the case. And so this focus on the U.S.

market and suggestion of also of some heinous actions is really unjustified. And I just repeat. There has not been any specific case raised at all. Coming back to Tom's question when we got cut off. I think a number of our clients have said they don't want to deal with multiple P&Ls.

So coming back to this question about unifying the offer, incentives are a critical part of it. Whether this is the best system and we're not seeking to achieve cross-selling, what we're seeking to achieve is a fully integrated offer. Whether this is the best way of doing it is a moot point, Tom.

It may well be that there are better ways to ensure integration than the way that we've outlined or that we've done in the last 3 or 4 years. The other question you asked was about 80K. The only things we've consistently -- we're not the only ones. 2 other shareholders have said publicly that they're dissatisfied with the Bain pricing.

And I think what certainly one of the shareholders is concerned about and the second largest shareholder, I think in the press release, they raised the question as to when managements will understand that the companies are not owned by management, but they are owned by the shareholders.

And in the case of ADK, we are aware of at least one other offer for the company that was rejected by management that one proposal, at least one other proposal was not looked upon by management as being favorable, not in a financial sense, but in an organizational sense and they failed to explore it.

So the -- I think the principal concern about the Bain offer is that this is a cozy offer that is welcomed by management, not because it's necessarily the best financial offer, but because they actively discouraged an alternative. And that is the primary concern.

And so coming back to your question about whether no deal is a bad deal, the question is, whether there could have been or there could be a better offer if management was more welcoming to the offer? And we have specific details on that.

We're fully aware of the details of that other proposal that was rejected, I would say, for organizational, put it euphemistically, rather than financial reasons. .

Ruchi Malaiya from Bank of America. Martin, in the background, we can see your accolades from Cannes and the [indiscernible].

And perhaps in the context of addressing your cost base, how do you weigh up the cost benefits of entering both product [indiscernible]?.

Well, obviously, we expressed some concern last year. One of our competitors, because they were concerned about the cost, withdrew. And I would say that many in our organization felt that, that was a wise decision by the competitor. We placed a proposal or a series of proposals in front of [ Essential ]. They've responded to several of them.

They haven't responded to all of them. We found their response to date not meeting our objectives. We haven't come to a final decision as yet. But we're seeing whether there is a meeting of the minds principally around cost.

So what we are saying is if you were starting from scratch from a zero-base, where would you have a creative competition or festival of the sort that Cannes represents? Is Cannes in the middle of the summer necessarily the best place to do it or the most cost-effective way to do it? Or has it become too big and too expensive? That's at the heart of what we've said to [Essential] and where we're still waiting for an adequate response.

As to the important of awards, we think they are important. Whether they're EFFIE awards or whether they're creative awards, the only question is whether Cannes or [ Essential ] has executed in the best way. And I would just give you one other observation.

The Eurobest Awards, which is another European-oriented award within the [ Essential ] stable is often used as a condition to further involvement in Cannes. That's something we find unacceptable.

For example, one of our agencies in Europe has been told that they will only be considered for a position as a judge at Cannes if the enter the Eurobest Awards. We think that's an unacceptable practice. So net-net, we've made some proposals. We've had some response from [Essential]. But as yet, we haven't had sufficient response. .

Thank you. I think we have drawn to a conclusion, if anything. Thank you, Martin. .

Okay. Thank you. Sorry about the break..