WPP Slashes Outlook Amid Client Spending Cuts, Sending Shares to 16-Year Lows

WPP, the world’s second-largest advertising agency network, issued a sharp profit warning this week, slashing its 2025 revenue and margin guidance after a surprisingly weak second quarter. The company cited a deteriorating macroeconomic environment, tighter client budgets, and a slowdown in new business wins as it now expects full-year like-for-like revenues excluding pass-through costs to fall 3% to 5%—a downgrade from the previous flat to -2% forecast.

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The London-based holding company, which owns global agencies like Ogilvy, VML, and WPP Media, said Q2 revenue declined as much as 6%, driven by a marked deterioration in June. First-half revenues are now projected to drop between 4.2% and 4.5% to around $7 billion. The decline prompted U.S.-listed WPP shares to plunge 16% on Wednesday, marking their lowest level since 2009 and extending a long downward trajectory that has seen the stock lose more than half its value during CEO Mark Read’s seven-year tenure.

Read, who announced in June that he will step down at the end of the year, admitted the second quarter was far weaker than expected and warned that the same trend is likely to persist into the second half. “Macroeconomic pressures have intensified and net new business has been lower than we expected,” he said, adding that WPP remains focused on long-term investment in AI and data while continuing to streamline costs.

The company’s guidance cut follows several high-profile client losses, most notably the $1.7 billion Mars media account and parts of Coca-Cola’s North America business, both of which migrated to rival Publicis Groupe. The result has been a double-hit: weaker organic growth from existing clients and fewer wins in the competitive global pitch market. Executives also acknowledged that tariffs and geopolitical tensions are influencing advertiser sentiment and forcing companies to reassess marketing budgets and timelines.

WPP’s challenges arrive at a time when the broader advertising industry is confronting a shift in where and how brands spend. Digital-first platforms—particularly those with granular targeting capabilities—continue to capture a growing share of ad dollars. Tech giants like Google (Alphabet), Meta (Facebook), Amazon, Snap, and Pinterest are formidable forces. Collectively, they absorb the bulk of digital ad growth, often offering more measurable performance-based campaigns than traditional agencies can deliver. Meta and Google alone accounted for over half of global digital ad spending in 2024, with TikTok (Bytedance) emerging as a potent rival among younger demographics.

Even within traditional agency circles, WPP is underperforming its peers. Publicis Groupe, bolstered by strong data and commerce offerings from Epsilon and Sapient, continues to outpace WPP in both client retention and growth. Publicis has also been more aggressive in integrating AI into its service model. Meanwhile, Omnicom, Interpublic Group (IPG), and Dentsu are navigating the same macro currents but have not issued guidance cuts of the same magnitude, raising questions about whether WPP’s problems are more internal than sector-wide.

Adding to the complexity is WPP’s ongoing internal overhaul. In June, the company rebranded its media investment arm from GroupM to WPP Media and has committed to investing in AI-driven campaign delivery and automation. While these efforts may pay off long term, the near-term picture is clouded by execution risk and the upcoming CEO transition. Newly appointed chair Philip Jansen, the former BT Group chief executive, is expected to lead a comprehensive review of operations and strategy, with M&A or restructuring options potentially on the table.

The outlook cut is WPP’s second of the year, and analysts are beginning to question whether the company can stabilize earnings in the current environment. “WPP is now clearly lagging behind Publicis and even some independents when it comes to new business momentum,” one London-based analyst noted. “AI and automation are necessary investments, but execution is key—and right now the company appears stretched.”

Looking forward, investors will focus on WPP’s August 7 earnings report for more detail on client behavior, the margin outlook, and any signs of stabilization in new business pipelines. For now, the market reaction reflects growing unease over WPP’s ability to compete effectively in a landscape increasingly defined by platforms, performance metrics, and automation. With the stock back at 2009 levels and the company in leadership limbo, WPP faces a critical inflection point as it looks to rebuild credibility and client trust in an increasingly unforgiving advertising ecosystem.