Credit: Vardan Papikyan via Unsplash https://unsplash.com/@varpap
WPP, once the world’s biggest advertising group but now suffering from shrinking revenue and anger from staff over a return to office order, is now taking a beating from investors.
The company posted full year revenue for 2024 at a negative 1% and forecasts more to come at -2% for 2025.
WPP shares fell 16% to the lowest point in four years as investors took in the December quarter result, with like-for-like revenue less pass-through costs down 2.3%.
“2024 did not end quite as we wanted,” CEO Mark Read said when briefing analysts on the full year results. “And even if the minus 1% was technically in the guidance range, I know that it will be a disappointment.”
However, Read did claim “enormous” progress in terms of the heavy lifting and network consolidation, simplification and step-up in data and technology.
“As I look at 2025, there are really three things that we need to do as a company, deliver on the promise of WPP Open, get GroupM back to growth and win more new business,” he said.
WPP Open is the company’s AI proprietary platform. The plan is to get all client-facing staff using it by the end of the year, adding to the 40,000 already super charging their work.
Last year pitches with WPP Open at the heart had a 10% increase in success rate.
“This year, we don't want any pitches without it,” Read said.
“And we need to unlock more integrated pitches with different commercial models, allowing us and our clients to share in the value we create and deal with some of the pricing pressures that we sometimes see.”
For GroupM, the urgency is around data, around media and new business with a focus on the US.
The media planning business was a standout among WPP’s divisions. While the creative side was sliding backwards, GroupM was up 2.7% for the year and 2.4% in the December quarter.
Read says closing the growth gap with best-performing peers means making sure that to leverage the full benefit of AI, data and technology at GroupM.
Brian Lesser, the global CEO of GroupM, appointed in July, was brought into the results briefing to pitch to market analysts.
He has what he described as “engaged extensively” with clients to understand their needs.
His priorities:
Data and technology, embracing AI. WPP Open and Media Studio form the backbone;
People. Investing in technical employees and workforce development. Four new roles focused on clients, growth, transformation and operations and market expansion.
Innovation. Introducing new proprietary trading models and media products to offer more performance to clients at efficient prices, using our expertise, scale and data capabilities.
Collaboration. Improving internal and external collaboration across GroupM and WPP integrating media, creativity and production more effectively.
Organisation design. Further “simplifying” structure to become a unified company with one voice to clients and partners. “In 2024, we made significant strides in eliminating complexity, but we know that we have to be simpler and there is more work to do,” he said.
He said GroupM is a big, vibrant growing business and in the past it was perhaps too complex and “not focused enough on our clients”.
“Our client expectation is that we bring them the best of the group in every engagement,” Lesser said.
“In terms of our go-to-market, we're there now. We are competing effectively. We are winning pitches. We are building businesses with our clients.
“We have everything we need to compete, win and retain clients now. The only constant in this industry is change. So you'll see us evolve, but that's the expectation of our clients.”
With data, the advertising industry is shifting from the notion that everything has to be in a traditional CRM database.
Now it’s a world where predictive models use more sources of data and disparate sources of data and data that's not available to a traditional CRM database.
“We're very focused on moving from ID to AI,” ,” he said.
“And what I mean by that is if all you ever do is ground something in a cookie or an e-mail address or a mobile ID, then you're severely limiting your view of consumer behaviour across an increasingly complex and fragmented marketplace.
“Data in the CRM database is not going to help you with TikTok or Meta. We have proprietary data at WPP, and that's important.
“And I'm not saying that having data is not important, but what's just as important, if not more important, is having the technology and the modelling capabilities to build predictive performance at scale to really meet consumers where they are in this fragmenting landscape.”
Slide from the post results briefing:
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