What’s next for WPP? I’ve worked in agencies for 30 years and seen most things, but nothing has captured my attention quite like the unfolding story at WPP. The once-unquestioned industry juggernaut is facing its biggest challenge yet.
What’s the story?
WPP, the historical giant, has been facing some serious headwinds. You may have seen the news – the big mergers, like VMLY&R and Wunderman Thompson becoming VML, and the thousands of job cuts. It’s a clear sign they’re trying to slim down and get back on their feet. The problem is, while other rivals like Publicis seem to be navigating this tricky economic period a bit more gracefully, WPP is still struggling. They even had to downgrade their growth forecast, which is never a good look.
Why is this happening?
Part of it is the broader industry challenge. The post-COVID world, with its high costs and uncertain economy, has clients tightening their purse strings. Agencies everywhere are feeling the squeeze and the rapid emergence of AI is not helping. For WPP, some of the issues may be self-inflicted. The constant mergers and the high staff turnover can create a lot of internal friction. There are stories that employees are finding out about massive changes through press releases, which completely undermines morale and the very “brand” they are supposed to be selling.
Even with the tough market, WPP has had some very public struggles. Their media buying arm, GroupM, and its subsidiary, EssenceMediacom, have had a difficult run with account losses, which really hits the bottom line. It all points to a company trying to figure out its identity in a rapidly changing world. The agency landscape is a different beast now, and the old model of just being bigger isn’t necessarily better.
What’s next?
The big news is a changing of the guard at the very top. After a long tenure, Mark Read stepped down as CEO. His replacement is Cindy Rose, a former Microsoft executive with deep experience in technology and AI. This is a massive signal about the future direction of WPP. The company is betting that a new leader with a tech background can steer them toward innovation and away from their current struggles. They’re investing heavily in AI, which they believe will be the key to future growth and efficiency.
The question everyone is asking is whether these moves are enough. Will stripping down the company and bringing in new leadership be enough to turn the tide? Or will WPP continue to flounder, serving as a cautionary tale for the industry? For those of us who remember WPP as the leader, it’s a fascinating story to watch.
WPP’s history
In its earliest form, WPP was a humble manufacturer of wire shopping baskets, founded as Wire and Plastic Products plc in 1971. Its transformation into a global advertising powerhouse began in 1985 when Martin Sorrell, a former finance director at Saatchi & Saatchi, acquired a controlling stake. Sorrell had a clear vision – to build a worldwide marketing services empire through a strategy of aggressive acquisitions. This marked the start of a new era, as the company shed its manufacturing roots and began to buy up agencies, with Sorrell quickly becoming a dominant figure in the industry.
Rapid growth
The company’s rapid growth was defined by a series of landmark acquisitions in the late 1980s. In 1987, Sorrell made a major move by acquiring the venerable J. Walter Thompson for an estimated £370 million. Just two years later, he followed up with the purchase of the prestigious Ogilvy Group for an estimated £570 million. These acquisitions brought iconic brands under the WPP umbrella and established it as a major player. This strategy continued into the new millennium, culminating in the 2000 acquisition of the United States-based Young & Rubicam Group for an estimated £3.8 billion, a deal that officially made WPP the world’s largest advertising company.
Challeges
After decades of expansion, WPP began to face significant challenges, including a shifting industry landscape and internal complexities. In 2018, following Sorrell’s departure, Mark Read took over as CEO. His tenure was marked by a new strategic direction focused on making the company leaner and more integrated. This involved a period of consolidation, with major mergers like the combination of VMLY&R and Wunderman Thompson to form VML, and the sale of non-core assets like its majority stake in Kantar. WPP is now a company in flux, grappling with economic pressures and the rise of AI, as it seeks to define its future and adapt to a fundamentally altered market.
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