News28 Jan 2024 11:38
After more than 30 years at the top of WPP, Sir Martin Sorrell had established himself as the king of the global advertising market — a man who could charm clients, woo investors and strut his stuff at Davos, Sun Valley and other big events.
Then, in 2018, his reign came to an abrupt end. Sorrell, now 78, who had built up WPP from scratch, was ousted as chief executive after the company investigated allegations that he had used company funds to pay a prostitute — claims he strenuously denied.
Stepping into the void was Mark Read, who joined WPP as a 22-year-old Cambridge economics graduate before working his way to the top. Compared with his brash, big-ego predecessor, Read is softly spoken and seems not to enjoy the limelight.
This week, though, the 57-year-old will take centre stage as WPP hosts shareholders for a capital markets day at its trendy HQ, Sea Containers House, on the South Bank in central London.
He is likely to face a tough crowd. The company’s share price has fallen 18 per cent over the past 12 months, and by 36 per cent since Sorrell left — and on Read’s watch, international rivals Publicis, Omnicom and IPG have each overtaken WPP by stock market value. This is partly because it is more reliant on revenues from large tech companies, many of which expanded during the pandemic but have since cut back on jobs and marketing expenditure. WPP also generates a lesser proportion of its revenues from America, where the ad market has proved more resilient than elsewhere.
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Naturally, Read will highlight the positives. Under his tenure, WPP has returned more than £4 billion to investors in dividends and share buybacks. It also looks set to cash in on a mooted sale of its 40 per cent stake in Kantar, the market research firm, which could be valued at up to £7 billion.
And he will attempt to wow investors with WPP’s suite of ChatGPT-style generative AI tools, used to speed up and enhance the creative process of making advertising and marketing material. Last year, AKQA, an arm of WPP, won accolades for a Nike ad campaign that used artificial intelligence to display tennis star Serena Williams playing against her younger self.
Still, many analysts feel that technological advances offer more threat than salvation to the traditional ad giants.
Claire Enders, the head of media research firm Enders Analysis, believes that many of WPP’s largest clients will increasingly use generative AI tools to create their own ad materials in the future. “A lot of big companies have taken some of these functions in-house, and generative AI is simply going to spur that on,” she said.
The Nike ad campaign that used generative AI from a WPP subsidiary to pit Serena Williams against her younger self
The Nike ad campaign that used generative AI from a WPP subsidiary to pit Serena Williams against her younger self
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Another issue is that large tech businesses, such as Amazon a
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