WPP already wasn’t having a good year. Its outlook just got worse.
The ad-holding group on Tuesday (July 8) downgraded its full-year guidance, foreseeing declines between 3% and 5% in 2025 due to macroeconomic conditions and the network winning less net-new business than originally anticipated. Previously, the U.K.-based firm said that its like-for-like revenue less pass-through costs, an important measure of agency health, would be either flat or down 2% in 2025.
In its trading update, the group said that performance deteriorated as the second quarter progressed. Recent months have seen the agency lose several large accounts, including the $1.7 billion media business of Mars to Publicis Groupe in June. Earlier in the year, WPP saw Coke’s media and data business in North America move to the same rival. The Q2 period is now forecast to see declines between 5.5% and 6%, below expectations, putting WPP down in the range of 4.2% to 4.5% for H1.
Looking beyond WPP’s client losses, the news suggests that exterior forces like tariffs are having a bigger effect on advertisers. WPP executives in the spring stated that tariffs will “undoubtedly” impact how many clients prioritize investments in advertising and promotion. Whether similar headwinds are affecting competitors as strongly will become clearer in the coming weeks as more agency networks report their Q2 earnings.
“While we expected the second quarter to be similar to the first quarter, performance in June was worse than anticipated and we expect this pattern of trading in the first half to continue into the second half,” said WPP CEO Mark Read in a statement attached to the trading update. “Our focus remains on ensuring the right balance between investing in the business for the long-term and continuing to reduce structural costs, while taking appropriate actions to respond to the current trading environment.”
The revised outlook comes as WPP confronts a leadership transition and major changes to operations, including overhauling its network to center on artificial intelligence. The company is on the hunt for a new chief executive following Read’s announcement in June that he will retire at the end of December.
Read has served as CEO for seven years, attempting to steer WPP through the pandemic, inflation, global conflict and the rise of generative AI, but the company’s share price has plunged during his tenure and reached recession-era lows following this week’s trading update, Bloomberg reported. WPP is also in the midst of revamping its key media investment unit, which was officially rebranded from GroupM to WPP Media earlier in June.
