WPP has announced that long-serving CEO Mark Read will retire on 31 December 2025, concluding over three decades with the company, including seven years as CEO.
The search for his successor is now underway, with Read set to continue leading WPP through the transition.
The shares fell 1.3% in early trading.
Our view
WPP has begun the search for a new leader, with current CEO Mark Read preparing to step down at the end of 2025. The change at the top is a clear sign that more needs to be done to turn the company’s fortunes around. It follows a period of underwhelming performance that saw the group lose its crown as the world’s biggest advertising agency.
At its core, WPP’s media agencies deliver products and services spanning all parts of the advertising and communication spectrum. It boasts some of the world’s largest companies as its customers, and provides them with analytics, paid advertising campaigns and PR. As an idea of scale, WPP boasts a global workforce of 115,000. That’s a lot of mouths to feed and can amplify the downside to profits when revenue dries up.
The group has had a laser-like focus on boosting its digital marketing offerings. The new company plan involves focusing on faster-growing end markets (like how to help clients succeed online) and technology. Hundreds of millions will be spent over the next few years, most of which will go on new staff, technology, including AI, and incentives.
Before it can reach a home stretch, it's worth remembering that WPP's agency business is still being nibbled away at, and it's turning to acquisitions to keep growth coming. The group's doing what it can to combat these challenges, including consolidating and streamlining its offering.
The sale of its stake in PR firm FGS Global brought in around £0.6bn of cash that was used to pay down debt levels, strengthening the balance sheet. That provides some wiggle room to invest internally or make acquisitions should attractive opportunities arise.
WPP has seen no direct impact from the US-led tariffs so far. But if they lead to an economic slowdown and WPP’s customers need to rein in costs, advertising budgets will likely be one of the first things on the chopping block. There hasn’t been much change in client behaviours yet, but the picture can change quickly.
We’re also mindful of AI. This offers enormous opportunity for WPP, but also risk. There’s a chance the advertising and analytics landscape changes so fast that WPP is left behind if it doesn’t peddle fast enough.
WPP is working hard to future-proof the business. But progress hasn’t been as swift as some other names in the advertising world, which has seen WPP’s valuation fall well below the long-run average. Whoever ends up in the CEO seat will need to hit the ground running if performance and investor sentiment are to improve.
Environmental, social and governance (ESG) risk
The media industry’s ESG risk is relatively low. Product governance is the key risk driver, alongside business ethics, labour relations and data privacy & security.
According to Sustainalytics, WPP’s management of ESG risk is strong.
The group has a board-level sustainability committee assisting in its oversight of corporate responsibility and sustainability matters. Advertising companies collect, analyse and process large volumes of sensitive client data, and there are often large fines in place for failing to comply with privacy or security regulations. WPP’s due diligence process includes a review of ethical risks, such as bribery, corruption, and human rights issues.
WPP key facts
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