:00:00. > :00:12.This is Business Live from BBC News, with Rachel Horne and Ben Thompson.
:00:13. > :00:14.Advertising a slowdown, global giant WPP misses targets
:00:15. > :00:15.as big companies pull spending on adverts.
:00:16. > :00:32.Live from London, that's our top story on Wednesday 23rd August.
:00:33. > :00:36.Consumer giants are cutting their ad spend with WPP, but is it a sign
:00:37. > :00:38.of economic weakness or just a symptom of the shift
:00:39. > :00:44.Also in the programme, Typhoon Hato causes havoc in Hong Kong,
:00:45. > :00:47.leading to hundreds of flights being cancelled and a stock
:00:48. > :01:00.We have the FTSE 100, down, the WPP share prices down already tempers
:01:01. > :01:05.and this morning. We will bring you all of those figures in a moment.
:01:06. > :01:08.And we'll get the Inside Track on the cost of keeping fit.
:01:09. > :01:11.We meet one man flexing his financial muscles -
:01:12. > :01:14.and boosting his gym empire in the depths of a recession.
:01:15. > :01:18.And with the global fitness industry now worth a staggering $83bn
:01:19. > :01:21.a year we want to know, how much do you spend
:01:22. > :01:40.WPP - the world's largest advertising group -
:01:41. > :01:43.has cut its sales outlook, after a drop in demand
:01:44. > :01:46.from consumer goods clients and weak trading in the US.
:01:47. > :01:49.Like-for-like net sales fell 0.5% while underlying net sales in the US
:01:50. > :01:51.fell by 2.2% in the first half of the year.
:01:52. > :01:53.Shares in he giant have tanked this morning ,
:01:54. > :01:58.The advertiser is seen a bellwether for an industry that's changed
:01:59. > :02:06.While the total spent by brands globally on advertising in 2016
:02:07. > :02:11.was up at $493 billion, where it's being spent
:02:12. > :02:21.were effectivly flat, global digital ad sales
:02:22. > :02:29.That number will of course keep growing,
:02:30. > :02:32.and by 2021 it's estimated it will account for 50% of all adverts.
:02:33. > :02:38.Well, mostly to Facebook and Google, together they control
:02:39. > :02:40.54% of the global digital advertising market,
:02:41. > :02:44.But are adverts on these platforms even getting to their audience?
:02:45. > :02:48.It's been estimated that invalid traffic, that's where a bot rather
:02:49. > :02:51.than a human views an advert, is costing advertisers a staggering
:02:52. > :02:55.$16.5 billion a year, and that number is expected to grow.
:02:56. > :02:57.Well, a little earlier I spoke to Sir Martin Sorrell,
:02:58. > :03:00.the CEO of WPP who explained what his company was doing
:03:01. > :03:15.There are a couple of points here. First there is the bots issue, that
:03:16. > :03:20.these ads are not being watched by people but by machines and we are
:03:21. > :03:26.ever vigilant on that. Group M, our media planning and buying company,
:03:27. > :03:33.which buys about $75 billion of media around the world, about 25% of
:03:34. > :03:39.worldwide media that goes direct to agencies, or goes through agencies.
:03:40. > :03:43.They have very high standards, in terms of viewability, measurability
:03:44. > :03:47.to try and counter that. And then there is the consumer brand safety
:03:48. > :03:51.issue, which you are sort of referring to, which is that some
:03:52. > :03:55.material might end up in less than satisfactory, to put it mildly,
:03:56. > :04:00.areas or parts of the internet. And that is an area it has become even
:04:01. > :04:04.more important, fake news and fraud also becoming important. And that is
:04:05. > :04:09.a question. You can't be 100% certain that you can cover this,
:04:10. > :04:14.that you can be much more stringent, in terms of the rules. Facebook, for
:04:15. > :04:20.example, and Google have made strenuous efforts recently, under
:04:21. > :04:23.some pressure to do so, but they have made strenuous efforts
:04:24. > :04:28.recently, and they dominate digital advertising.
:04:29. > :04:30.With us is Stephen Woodford, Chief Executive at the
:04:31. > :04:37.There is a lot for us to get through in these results but first of all it
:04:38. > :04:42.is worth living at what advertising tells us about the wider economy,
:04:43. > :04:46.because it is one of those things we call a bellwether, when advertising
:04:47. > :04:50.is doing well, the economy tends to do well, and vice versa. So what
:04:51. > :04:54.does this tell us about the economy? When you look at the contribution
:04:55. > :04:58.advertising makes to the economy it is a very important bellwether. It
:04:59. > :05:02.has a big impact on the overall economy, as well as being a big
:05:03. > :05:06.sector in its own right. One of the things we should think about it is
:05:07. > :05:10.2016 was a record year for the advertising industry, particularly
:05:11. > :05:16.in the UK. 2017, we are still forecasting some growth. Why was
:05:17. > :05:28.2016 so good? It was surprisingly good because in effect all of the
:05:29. > :05:31.Brexit scare stories did not serialise, the this is where it
:05:32. > :05:34.feeds through to the bellwether, because business confidence in a
:05:35. > :05:38.sense determines a lot of advertising decisions, so it is
:05:39. > :05:43.businesses's expectations of what consumers will be doing. What do you
:05:44. > :05:46.think that these figures we have seen from WPP? The markets are
:05:47. > :05:51.surprised, the share price has fallen by over 10% this morning.
:05:52. > :05:55.Were you expecting the sorts of figures from WPP? I think we were,
:05:56. > :05:59.in terms of potentially less organic growth may have had in the past but
:06:00. > :06:04.I can't really comment on the share price fall, but I do think it is
:06:05. > :06:08.worth saying about WPP, it is the world's leading company so it is a
:06:09. > :06:10.very good bellwether for the global advertising industry, and it is also
:06:11. > :06:16.a reflection of the British advertising industry, how many
:06:17. > :06:19.industries is the world's biggest company a British one? I think WPP
:06:20. > :06:23.is something we should be very proud of here in the UK. If it is a
:06:24. > :06:28.bellwether, does it sound the alarm that they are growing their growth
:06:29. > :06:34.predictions, sales have fallen, problems in the US? I can't comment
:06:35. > :06:37.on the detail of that but I think there is overall a potential
:06:38. > :06:42.softening of demand because of the overall global economy. That being
:06:43. > :06:46.said, if the US carries on performing strongly I would expect
:06:47. > :06:50.advertising to rebound. Certainly in the UK at our expectations are low
:06:51. > :06:54.growth but still some growth in line with the economy. If you look at an
:06:55. > :06:58.organisation like WPP, traditionally made a lot of its money from TV and
:06:59. > :07:05.big billboard ads. Clearly that has now changed and it is now digital.
:07:06. > :07:09.You might say a integrated agency that can do online, print, big
:07:10. > :07:14.posters and TV is commandeering the market. Where is the growth coming
:07:15. > :07:17.from? Digital platforms in particular, and the piece before
:07:18. > :07:22.talked about the growth of Google and Facebook. But it is worth saying
:07:23. > :07:27.all advertising media is going digital. Even the oldest media,
:07:28. > :07:31.posters, is not for the 5% digital, in terms of digital outdoor display
:07:32. > :07:39.ads and so on. The industry, television and radio and press is
:07:40. > :07:44.going digital. This year, digital revenues up by 25%, a quarter of all
:07:45. > :07:48.of their advertising revenue. Even press is very strongly going on the
:07:49. > :07:52.digital channels, so I think the whole industry is changing towards
:07:53. > :07:55.more digital channels. This dominance from Facebook and Google,
:07:56. > :08:01.when it comes to digital advertising, can you see anybody is
:08:02. > :08:05.coming in in the future and taking any share off them? It is hard to
:08:06. > :08:11.predict the future. The rise of other platforms, Google and Facebook
:08:12. > :08:16.will fear most new platforms coming, whether it is Amazon or others. It
:08:17. > :08:20.is a strong overall indicator of the health of the market is the balance
:08:21. > :08:24.between these two things. Generally, advertising works best when you use
:08:25. > :08:28.a multiple of channels, ideally for the five different channels. TV on
:08:29. > :08:32.its own can be very good, digital on its own can be very good, when you
:08:33. > :08:39.use the two together you get better results. The best advertising tends
:08:40. > :08:43.from using brand building advertising and short-term
:08:44. > :08:48.advertising, which is usually digital. You have an update on the
:08:49. > :08:53.WPP share price, you saw it on the screen, it is down 149 points this
:08:54. > :08:58.morning, more than a 10% fall in the share price in the first 38 minutes
:08:59. > :09:05.of trade for WPP, so investors not to thrilled.
:09:06. > :09:08.In Hong Kong, the city's stock market has been shut down
:09:09. > :09:11.and flights have been cancelled by Typhoon Hato, which has been
:09:12. > :09:16.Sharanjit Leyl is in our Asia business hub.
:09:17. > :09:22.What impact is that storm having on the financial markets, they have
:09:23. > :09:27.been shut, schools and businesses shut, what impact will that have on
:09:28. > :09:31.the city? You pretty much said it, all of those things are shut down.
:09:32. > :09:39.Hong Kong has come pretty much to a standstill. The typhoon really a
:09:40. > :09:44.category eight storm, down from category ten, which means the struct
:09:45. > :09:50.of Winscombe huge waves, uprooted trees, flooded streets, closed
:09:51. > :09:54.businesses. No trade for the Hang Seng. We know it is the worst storm
:09:55. > :10:00.the special administrative territory hasn't Jordan Silk -- since 2012.
:10:01. > :10:11.More than 400 flights have been cancelled and cafe Pacific said the
:10:12. > :10:15.storm would severely impact flights. We are told only one flight managed
:10:16. > :10:21.to land earlier this morning. Now the schools are closed, all of the
:10:22. > :10:26.skyscrapers in Hong Kong's iconic skyline are shrouded in darkness, as
:10:27. > :10:29.workers stay home. Bearing in mind it had been a category ten typhoon
:10:30. > :10:33.warning initially and this was really only the third time one had
:10:34. > :10:37.been issued since 1997 when the former British colony was handed
:10:38. > :10:40.over to China. Even though the territory suffers the storms on
:10:41. > :10:43.pretty much an annual basis, this one may well be bad enough to have
:10:44. > :10:50.an impact on businesses and the economy. Thank you very much.
:10:51. > :10:53.Let's take a look at some of the other stories making the news.
:10:54. > :10:56.Chinese car-maker Great Wall Motor has said it has not held
:10:57. > :10:58.talks with Fiat Chrysler, putting a possible bid
:10:59. > :11:02.Great Wall confirmed it had researched the US-Italian car-maker
:11:03. > :11:07.but made no substantial progress towards a deal.
:11:08. > :11:09.On Monday, the car-maker expressed interest in buying
:11:10. > :11:17.Shares in the Chinese firm fell 2% in Shanghai after the announcement,
:11:18. > :11:21.Amazon's blockbuster deal to acquire Whole Foods Market for $13.7 billion
:11:22. > :11:27.Whole Foods shareholders are voting today on the deal,
:11:28. > :11:29.which would propel Amazon further into the grocery business
:11:30. > :11:35.The size of the gender pay gap in the movie industry has been
:11:36. > :11:40.It estimates the top ten actors earned $488m last year -
:11:41. > :11:45.three times their female counterparts - who took home $172m.
:11:46. > :11:48.Transformers star Mark Wahlberg tops the male list at $68m, compared
:11:49. > :12:02.with $26m for La La Land's Emma Stone.
:12:03. > :12:08.Let's look at how the markets have been getting on. Markets in Asia
:12:09. > :12:12.generally up just a little, following a surge they saw yesterday
:12:13. > :12:18.running with a bit of optimism over US tax reform plans. The Hang Seng
:12:19. > :12:22.is actually closed at the minute because of typhoon Hato, so that is
:12:23. > :12:29.why it is flat. Wall Street, the dial up almost 8%. An even higher
:12:30. > :12:34.rise on the Nasdaq. Much more attention will be on the central
:12:35. > :12:38.bank meeting duties. Tomorrow. Will the Federal Reserve boss give any
:12:39. > :12:43.plans about the bank's plans to wind in its huge bond holdings? We will
:12:44. > :12:49.talk about that in a moment. Let's see European markets have been
:12:50. > :12:59.doing, the FTSE is down ever so slightly. WPP share prices down more
:13:00. > :13:09.than 11% now this morning. Future growth down from 2% to between zero
:13:10. > :13:13.and 1%. In Europe, central bank chief, the ECB chief, Mario draggy,
:13:14. > :13:18.he is going to speak today. Investors will be looking to see
:13:19. > :13:24.what he says. Let's go to Wall Street and Michelle Fleury. When
:13:25. > :13:28.Hewlett-Packard split into two companies, HP ink which has as its
:13:29. > :13:33.printer and copier business was considered the runt of the letter.
:13:34. > :13:39.Investors saw for growth opportunities in the enterprise side
:13:40. > :13:46.but HP think has surprised many, in a good way. -- HP Ink. Given the
:13:47. > :13:52.lacklustre PC and printer market, profits are likely to fall. Look out
:13:53. > :14:00.for more news on America's housing market. Recent data shows house
:14:01. > :14:04.prices have recovered. The latest figure is expected to show an
:14:05. > :14:07.increase in July but investors are watching the signs of weakness. So
:14:08. > :14:16.well concerned over a looming slowdown hurt profits at home
:14:17. > :14:18.improvement retailer, Lowes, which shows its second-quarter results.
:14:19. > :14:27.Joining us is James Quinn, business editor, Telegraph Media Group.
:14:28. > :14:35.We spoke about WPP at the start of the show. Is this a shock? I think
:14:36. > :14:40.it is one of those bellwether stocks. If you look at the global
:14:41. > :14:46.economy, pretty stark words from Martin Sorrell earlier. I think it
:14:47. > :14:53.is a surprise, yeah. Possibly an element of surprise. The share price
:14:54. > :14:59.will probably end the day six or 7% down. When a company share price
:15:00. > :15:08.drops this far, this fast, will you now see people going, let's by a
:15:09. > :15:11.bargain? There will be some bargain buyers looking for activity. It is
:15:12. > :15:16.August. A lot of traders will be away. A lot of problematic trades
:15:17. > :15:23.kicks in there. Then real-life traders return. Sally is not here
:15:24. > :15:28.today. She gets very excited about the central bank action. I will play
:15:29. > :15:39.that role. We will hear from Mario Draghi today. What we expect from
:15:40. > :15:44.Mario Draghi? She has started speaking while we have been on air.
:15:45. > :15:47.He is largely talking about Monetary Policy Committee regulation. Not
:15:48. > :15:51.talking too much about tapering. The initial reaction was quite muted. At
:15:52. > :15:56.the same time we have strong numbers from Germany today showing how
:15:57. > :15:59.strongly the German economy is growing. That is quite interesting
:16:00. > :16:07.in terms of what he and Janet Yellen will talk about. I think she will
:16:08. > :16:14.avoid talking about tapering. Her speech will focus on financial
:16:15. > :16:20.stability. The speeches are analysed to the nth degree. On the on this
:16:21. > :16:24.programme can we talk about someone making a speech to avoid something.
:16:25. > :16:27.We will talk more in awhile. For now, thanks.
:16:28. > :16:30.Still to come, the business of fitness - we hear from the man
:16:31. > :16:33.who's bucking an economic slowdown and running one of the world's most
:16:34. > :16:35.successful gym chains in South America.
:16:36. > :16:45.You're with Business Live from BBC News.
:16:46. > :16:49.Identity theft has hit new record levels, according to the Fraud
:16:50. > :16:55.It says nearly 90,000 cases were recorded by the group
:16:56. > :16:58.in the first half of the year, with young adults
:16:59. > :17:01.The BBC's personal finance reporter, Kevin Peachey,
:17:02. > :17:14.Kevin, what do the numbers tell us? They show that cases went up by 5%
:17:15. > :17:18.in the first half of the year. That takes it to 500 cases a day.
:17:19. > :17:24.Name-macro says it has reached epidemic levels. -- Theresa May. It
:17:25. > :17:28.is not the old and vulnerable. It is people in their 30s and 40s. People
:17:29. > :17:33.with a digital footprint to have been online are social media and so
:17:34. > :17:40.their identities have been stolen. What can people do to prevent it? Is
:17:41. > :17:44.it as simple as constantly changing your password? There is an element
:17:45. > :17:48.of that. Some people don't realise they have been victims because the
:17:49. > :17:53.fraudsters have taken out a loan in their name. They are getting their
:17:54. > :17:57.details from public records and the dark web, part of the Internet that
:17:58. > :18:00.is not available on a conventional search. So Cifas says yes, people
:18:01. > :18:10.should be changing their passwords. They should be using... Employers
:18:11. > :18:14.should be educating staff on how to keep on top of fraud prevention and
:18:15. > :18:18.making sure they are changing passwords and keeping safe online.
:18:19. > :18:22.What is really interesting is that young adults are the most likely
:18:23. > :18:28.target. When we think about online fraud, we thought maybe it was older
:18:29. > :18:34.people? Absolutely. The over 60s are the only age group cases are going
:18:35. > :18:38.down it is coming up the fastest among 20-year-olds. That is clearly
:18:39. > :18:43.because they are part of social media. They have a strong online
:18:44. > :18:48.presence. The 30s and 40s are where the most cases are overall.
:18:49. > :18:53.Thank you, Kevin. Go and change your password. There is an interesting
:18:54. > :18:59.story on the Business Live page. The new Heathrow boss slamming -- the
:19:00. > :19:07.former BA boss slamming Heathrow over its new runway. He says the
:19:08. > :19:11.plans are not credible. Sir Rod Eddington is advising a rival scheme
:19:12. > :19:17.proposing an alternative to the runway at Heathrow. Nonetheless, he
:19:18. > :19:19.knows what he is talking about. This claim will have some weight. That is
:19:20. > :19:23.on the website. Our top story - the world's biggest
:19:24. > :19:27.advertising group, WPP, has cut its sales outlook,
:19:28. > :19:30.following a drop in demand from consumer goods companies
:19:31. > :19:44.and weak trading in the US. Let me show you what the markets are
:19:45. > :19:49.doing. WPP one of the big fall is so far. Currently down almost 11%.
:19:50. > :19:56.Investors somewhat surprised by that lowering of the growth forecast.
:19:57. > :20:01.That is probably why the FTSE 100 has tipped into the red. The pound
:20:02. > :20:03.weakening once again over the course of the week. That has been a
:20:04. > :20:05.continuing trend stop And now let's get the inside track
:20:06. > :20:08.on the fitness industry... Globally the industry
:20:09. > :20:11.was worth $83.1bn in 2016, and it continues to grow,
:20:12. > :20:17.specially in Europe and the USA. Latin America has seen slower
:20:18. > :20:19.growth, but 20 million consumers there use more
:20:20. > :20:22.than 65,000 health clubs. In Brazil, one man has
:20:23. > :20:26.been defying all trends. Edgard Corona's Smart Fit now has
:20:27. > :20:33.365 gyms across the continent. The BBC's Daniel Gallas metup
:20:34. > :20:35.with him in Sao Paulo. He began by askinghim how he has
:20:36. > :20:51.expand the business in the middle the whole idea is that -- at the
:20:52. > :20:56.beginning is less divine. When we want uniforms, we chose fashion
:20:57. > :21:07.designers. It is a very important factor. Everything together. The
:21:08. > :21:11.system that you provide, the programmes that you create, help us
:21:12. > :21:18.to be different from the market. If you are in the US, from the total
:21:19. > :21:27.number of members, you have 70 weight percent in this business. --
:21:28. > :21:30.seven to 8%. The people come. What makes members stay is the right
:21:31. > :21:35.process to deliver results. What we are looking for and trying to
:21:36. > :21:45.improve his results in a short period of time. So the great value
:21:46. > :21:52.that you have is time. If I ask you to exercise two hours a day, you
:21:53. > :21:59.will say, I don't have this time. But you can come here three times a
:22:00. > :22:03.week, 30 minutes. Increase your metallic -- metabolism speed, reduce
:22:04. > :22:12.your weight, improve your health. You will see a healthy, more
:22:13. > :22:15.beautiful, thinner... A lot of people say that Brazil is a very
:22:16. > :22:23.hard place to do business, that it is risky to invest here. Why do you
:22:24. > :22:29.do it and how do you do it? For sure, maybe it's not an easy place
:22:30. > :22:34.to do business. But in Brazil, everything that you do, regulations,
:22:35. > :22:46.regular Tories and everything, is very, very tough. A lot of laws, a
:22:47. > :22:58.lot of rules to improve people's lives. And most expensive. Maybe
:22:59. > :23:07.Latin Americans understand how to work in this kind of environment.
:23:08. > :23:09.Expanding in a downturn. Some markets are pretty resilient. We
:23:10. > :23:18.have been asking you how much you would spend on keeping fit. Amanda
:23:19. > :23:24.says walking and housework are free. Ed says, how much of that ?83
:23:25. > :23:32.billion, it's actually dolorous, is made up of multiple gym memberships
:23:33. > :23:38.going on used? Jerome says he pays ?90 per month, which is ?300 for
:23:39. > :23:43.every swim he takes. Samantha says ?85 on running trainers, worth every
:23:44. > :23:48.penny. Good trainer is important. Andrew says YouTube provide advice
:23:49. > :23:55.for exercise at home. Lots of free online sessions. Jim locations are
:23:56. > :24:00.very smart these days. Mine is next to a KFC and a McDonald's. It is a
:24:01. > :24:09.vicious circle. James Quinn is back with us. There is a really nice
:24:10. > :24:13.story in the Guardian. Poor and overpriced funfair rides could be
:24:14. > :24:20.closed under new rules. There is a shining light on this, we may get
:24:21. > :24:26.better rides? That's right. The competition authority has decided to
:24:27. > :24:30.look at this sector, questioning whether when one funfair comes to a
:24:31. > :24:35.town, whether another one can, the same time, whether pricing too high.
:24:36. > :24:43.They are really expensive. If you want to go on the merry-go-round, it
:24:44. > :24:50.is $5, $6. Yes. Some pricing is in question. The showman 's Guild of
:24:51. > :24:55.Great Britain, the governing body of the funfairs, has said, yes, we
:24:56. > :25:04.agreed. Maybe some of our practices are not up to scratch in the modern
:25:05. > :25:12.era. Let's wrote in the New York Times. Apple plans for a self
:25:13. > :25:16.driving car. It is a crowded market. It seems Apple has decided they will
:25:17. > :25:22.put their technology to use in a self driving car. Apple's
:25:23. > :25:27.headquarters is in silicon valley in the US. They will try this
:25:28. > :25:33.technology in a shuttle bus that takes employees to work. That is a
:25:34. > :25:40.risk! It is slightly different to testing and iPhone! Good to see you.
:25:41. > :25:45.Thank you James. Good -- thank you for all your comments.
:25:46. > :25:53.Really interesting when you talk about how much the fitness industry
:25:54. > :25:55.is worth. 83 billion dollars a year. It is all the gear, everything.
:25:56. > :25:59.There will be more business news throughout the day
:26:00. > :26:01.on the BBC Live web page, and on World Business Report.
:26:02. > :26:14.Good morning. It has been a pretty wet night across Northern Ireland
:26:15. > :26:22.and Scotland. I am hopeful of the weather improving from any today as
:26:23. > :26:23.the rain band clears, you can see the front which is draped across