Toby Melville/Reuters
- WPP issued two profit warnings this year amid a slowdown in ad spending from its tech clients.
- The company has been undergoing a massive transformation that has involved merging agencies.
- 2024 will be a pivotal year as WPP's transformation takes shape and ad spending is expected to recover.
Advertising holding company giant WPP issued two profit warnings this year as tech clients cut back on spending and its US media business lost some key clients and pitches to rivals.
The company's share price was down around 10% in the year to date at the time of publishing and the group has embarked on a cost cutting plan as it aims to simplify its offering to clients. Meanwhile, WPP is embracing artificial intelligence, a technology that could open up further efficiencies but also massively disrupt the agency business model.
Next year could be a pivotal time for WPP as its transformation plan takes shape and as the global ad market is expected to recover. Plus, WPP is set to appoint a new chairman to its board.
Absent of merging more of its agencies, insiders wonder whether a bigger change is afoot. WPP has said it plans to reveal more about its strategy at its capital markets day in January.
Mindshare Global CEO Adam Gerhart has taken on additional duties as GroupM North America CEO while the company searches for a permanent replacement.
Ad giant WPP's media investment division GroupM has grown more than 23% since Christian Juhl took the reins as global CEO in 2019, but it stumbled this year, having lost more than $1.6 billion in business to competitors in the US alone, according to the research firm COMvergence. Now it has a plan to simplify its business model.
In October, WPP confirmed it had fired a GroupM China executive who had been detained by Shanghai police on charges of bribery. It came amid wider international business concerns about Chinese law enforcement targeting executives at foreign companies in the region following an update to its anti-espionage law. China is WPP's fourth-largest market by revenue and a priority for its future growth.
As advertising agencies begin to offer more solutions using AI, their demand for compute is rising. WPP, Media.Monks, and Taboola are among the ad companies harnessing Nvidia's chips and software.
Published in December 2021, Business Insider took a deep dive into WPP CEO Mark Read's turnaround plan as he marked three years in the role.