WPP to invest $318 million in AI annually, doesn’t expect much revenue growth

WPP will invest nearly $318 million annually in AI technology, doesn’t expect much revenue growth in 2024 and may eliminate some jobs as it looks to cut costs, CEO Mark Read said Tuesday. WPP, which is hosting an investor day today, announced that it expects 2024 revenue less pass-through costs to be flat to up 1% from 2023. WPP expects to report 2023 revenue rose 0.9%, in line with its previous guidance. “We’re seeing a similar macro environment in 2023 going into 2024, but we do expect an acceleration of revenue into 2025, a very strong new business pipeline. That gives us confidence to see stronger growth in the future,” Read told Ad Age. Read said the amount WPP is expected to spend on AI this year is slightly more than what the holding company invested in AI last year. He did not specify how long the annual $318 million investments would take place. “We’re going to paint not just a vision of the future, but how it’s operational today, how we’re using it to augment our creativity, how we’re using it to produce finished work for clients,” Read said, adding that some of the potential products haven’t yet been showcased publicly. WPP has also completed the broader restructuring process it has been going through over the past few years, Read said. This includes shifts at its six networks—AKQA, Ogilvy, VML, Hogarth, GroupM and Burson—which now represent close to 90% of WPP’s revenue. The structural changes this year will cost the holding company more than $158 million, but will also save WPP the same amount in 2025, according to a statement by the holding company. Related: Behind agency restructurings Beyond its restructuring savings, WPP will also be looking to save over $221 million through “efficiency opportunities” across its back office and other parts of the business, the company said. “There will unfortunately be some redundancies, but we’re not going to go into details on specific numbers of people at this point,” Read said. Grey, which is part of the AKQA network, experienced layoffs earlier this month, according to multiple people close to the situation. Read declined to comment on those layoffs. While Read didn’t directly deny the possibility of future sales or mergers, there aren’t any moves currently planned, he added. “The structure of WPP is just actually what we need for the future,” Read said. The news of the AI investment comes less than a week after Publicis Groupe announced it would invest $326 million in AI in the next three years. Publicis also introduced CoreAI, a tool it expects to enhance its employee workflows across creative, media, software, operations and insights. Publicis said its organic revenue grew 6.3% in 2023. Today, WPP also introduced capabilities of its AI platform WPP Open, which is being used by 28,000 employees on clients such as L’Oréal, Nestlé, and Mondelēz. Some examples shown during the first half of WPP’s investor day presentation included using the AI platform to create mood boards and derive insights for different brand campaigns. Ultimately Read said he sees AI “enhancing human creativity.” “AI is going to automate some tasks, but it’s going to create a whole new range of jobs that we didn’t have before,” Read said. “We have a big production business Hogarth in WPP, and it’s going to create lots of opportunities for us to expand Hogarth further. So I think it's too early to say the impact on jobs. And I think by increasing productivity it's going to make us more efficient. It's going to help deliver higher ROI to our clients.”

WPP to invest $318 million in AI annually, doesn’t expect much revenue growth

Featured Stories