A 2.5% decline in gross margin during the first five months of the year sent shares in advertising giant WPP lower on Wednesday, as "demanding" markets persisted in western continental Europe.Although reported gross margin was down 2.5% at £3.908bn, it was up 5.9% in constant currency and 4% higher on a like-for-like basis, marking a slight improvement on the first quarter.The FTSE 100-listed group also admitted it continued to face challenges in western continental Europe, with Austria, Belgium, Greece, Italy, Spain and Switzerland all continuing to remain relatively difficult. The group said the outlook for 2015 was "very similar to 2013, perhaps with slightly increased client confidence", with the period expected to prove "demanding" on the back of a strong pound and weak faster growth market currencies. However, the group also said that if budgets and first quarter revised forecasts are met, 2014 will be another strong year for WPP.Revenue in the first five months of the year was up 1.2% at £4.425bn, although at constant currency had jumped 9.8%. On a like-for-like basis, excluding the impact of acquisitions and currency fluctuations, turnover was up 7.6% compared with the same period last year, an improvement on the first quarter of this year."The pattern of gross margin [...] growth in 2014 is generally similar to the final quarter of 2013 and first quarter of 2014, with some overall further improvement in the last two months and with continuing growth across all geographies and all sectors," WPP said."On a like-for-like basis, advertising and media investment management and branding & identity, healthcare and specialist communications [...], as in the first quarter of 2014, continued to be the strongest sectors, with data investment management revenues and gross margin or net sales improving significantly in both April and May, partly reflecting the disposal of a call centre operation in the US in April 2014." The share price dropped 0.8% to 1,238p by 12:45.NR