The $8 bln ad group’s boss Mark Read is to retire after seven years. His successor will inherit a company with weak growth, but one that’s invested heavily in artificial intelligence. Trouble is, the market is now fretting that AI may hinder the likes of WPP, rather than help.
Mark Read, directeur général de WPP Group, la plus grande agence mondiale de publicité et de relations publiques, pose pour un portrait dans leurs bureaux à Londres, Royaume Uni. /Photo prise le 17 juillet 2019/REUTERS/Toby Melville
Alarm bells have been sounding for WPP since its full-year results in February, which revealed a net revenue decline of 1% and forecast flat net sales at best for the year ahead. Rival Publicis Groupe, in contrast, has guided for revenue growth of up to 5% in 2025. WPP investors, who were already fretting that the forthcoming merger between Interpubliccould leave their group as a distant third, sent the shares down 16% in a day.
The optimistic take is that an ability to create a greater volume of hyper-relevant advertising materials means more work of some description for legacy ad agencies. But notwithstanding an AI-driven reduction in ad production costs, WPP’s army of human creatives implies it starts with a high cost base. Even if Read hasn’t strictly speaking had his own job replaced by AI, the direction of travel looks clear.
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