Speculation continues to swirl over a possible WPP breakup

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WPP reported Q1 revenues of £3.4 billion ($4.27 billion), equating to a 1.4% annual decrease or a 5% reduction when “revenue less pass-through” (£2.69 billion, or $3.36 billion) is considered.

Executives at the agency holding company underlined client wins such as AstraZeneca, Canon, Molson Coors, and Nestlé (among others) and how investments in AI and closer integration with its agency portfolio will improve future results. 

However, for some, the figures, which represent continued flat or declining revenue performance, signal the need for a more root-and-branch turnaround approach for the entity that is still thought of as the largest marketing communications agency in the world — even if its market cap, which nears the $11 billion mark significantly lags rivals such as Publicis Groupe or Omnicom.

In fact, multiple sources separately told Digiday that speculation has continued to mount in recent weeks that WPP’s future may include a breakup whereby individual entities within the agency holding group are sold off, or it is outright taken off the public markets.  

The sensitive nature of such a potential outcome means that sources often declined to be named in return for candor. Separate former WPP insiders told Digiday that internal speculation, albeit informal, has been rife in recent weeks, with some noting that selling off specific units to private equity could be an outcome.    

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“It’s definitely been spoken about in recent weeks and was being spoken about by some at its Investor Day [hosted in January] earlier this year,” said one source. “The challenge is that it’s too big for one entity [such as a PE firm] to take over, as it would require significant debt.”

WPP declined to formally comment to Digiday’s request for comment.

Meanwhile, a separate former WPP insider noted how consolidating the portfolio of brands within the holding group could lend itself well to a potential group breakup, whereby individual units are sold off to potential buyers.  

“WPP could be really well placed to lose some of the chunks, and that could go about fixing its share price, which is absolutely disastrous compared to other holdcos.”

Albeit, a third source with direct knowledge of WPP’s latest financials and current thinking quickly reiterated the holding group’s stated turnaround plan. “They’re in a ‘invest in AI’ sort of mind,” they noted, adding that its focus was continued integrations to improve its competitiveness going forward. 

In a prepared statement earlier this week, WPP CEO Mark Read claimed its Q1 results aligned with its earlier expectations and noted how AI partnerships with Google and OpenAI helped spur initiatives such as WPP Open that ultimately clinched new clients such as Nestlé’s media account. 

“Structurally, VML is now well established and is on track to deliver savings… GroupM is progressing well with its simplification, and Burson will be operational in July,” he added, lauding its “more agile [agency] structure.”

A cornerstone of WPP’s turnaround initiative has been the closer integration of its portfolio, a smorgasbord of agency units accrued over a decades-long spree of acquisitions that has included amalgamating specific departments and job cuts.

WPP’s GroupM media-buying arm has been at the forefront of this drive, sources told Digiday, which has involved many of the functions of agencies from within the unit being ingested to GroupM.

Speaking with market analysts this week, WPP’s CFO Joanne Wilson noted how this “complicated initiative” will continue into the second half of 2024. “You don’t enter into initiatives like this without some disruption,” she said, noting that it will deliver up to $156 million in annualized savings.


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