The CEO of WPP (WPP), Mark Read, announced his retirement from the advertising giant after seven years at the helm on 9 June.
Read will be staying on at the communications company until the end of year until a successor is found to ensure a ‘smooth transition’ according to WPP chair Philip Jansen.
Under his tenure as CEO the company’s share price has halved taking its market capitalisation to approximately £6 billion and since the appointment of former BT (BT.A) chief executive Jansen in July 2024 there has been speculation about his position.
Year-to-date WPP’s shares are down 33% as the company posted worse-than-expected first quarter revenue.
It warned in April that macroeconomic challenges will impact the group’s performance in the second quarter. Some of WPP’s advertising rivals seem to be responding better to the challenges facing the industry.
US rival Omnicom (OMC:NYSE) has chosen to combine with IPG (Interpublic Group) in a $13 billion merger which will create an entity of greater scale which could pose an increased threat to the ailing WPP.
Meanwhile European rival Publicis (PUB:EPA) reported a very strong first quarter with net revenue up 9.4%, reaffirmed its full year 2025 guidance, reported a 4.9% uptick in organic growth as well as ‘record’ new business wins.
WPP’s first quarter revenue was down 5% year-on-year to £3.2 billion and it mentioned that several clients will be impacted by Trump’s trade tariffs.
These contrasting fortunes suggest that WPP has been having problems with strategy and led to criticism that Read has failed to reposition the group in the face of structural changes in the advertising industry.
More recently the rise of AI and the increasing dominance of the advertising market over the last decade by tech giants Alphabet (GOOG:NASDAQ) and Meta Platforms (META:NASDAQ) has marginalised agencies like WPP.
Tony Walford CEO of corporate advisory firm Green Square told the media and marketing publication Drum: ‘When Mark Read took over from Sorrell in 2018, things were very different. During his tenure, we’ve seen the rise of Meta and Alphabet, which now dominate the market in terms of sheer media volume, coupled with the threat of AI becoming reality and the need to streamline operations to face the market differently. When you have over 100,000 staff in a business built in a different world, this is tricky.’
Russ Mould, investment director at AJ Bell says: ‘The share price falling further on Read’s departure is a sign that investors are all too aware of the problems at hand.
‘This isn’t a simple situation where all that’s needed is fresh thinking from a leadership perspective. WPP needs a complete overhaul and that won’t come easily or quickly.’
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