In a recent announcement, WPP’s CEO Mark Read outlined a forward-thinking strategy focusing on artificial intelligence (AI) to propel the company’s growth. Amidst a challenging environment in 2023, WPP, a global leader in advertising and marketing services, is positioning AI as a cornerstone for future success.
AI: an opportunity for marketing & creative enhancement
Contrary to common fears of AI as a disruptive force, Read emphasizes its role as a catalyst in the marketing industry. WPP’s approach views AI as a tool to augment human creativity, not replace it. The company leverages AI to streamline workflows, enhance media performance, and ultimately elevate the effectiveness of their creative outputs. This strategy includes an annual investment of £250m in data and technology, underscoring WPP’s commitment to this digital transformation.
Strategic pillars for growth
Leading through innovation
WPP’s strategy is anchored in its prowess in AI, data, and technology. The acquisition of Satalia in 2021 and ongoing investments in AI technologies are pivotal to maintaining this edge. Collaborations with tech giants like Adobe, Google, IBM, Microsoft, Nvidia, and OpenAI further solidify WPP’s position in the market.
Transforming creatively
A significant aspect of WPP’s plan involves expanding client relationships through a blend of creativity, media, production, and public relations. The focus is on capitalizing on emerging areas like e-commerce, influencer marketing, and retail media.
Building strong brands
WPP aims to lead with its agency networks – AKQA, Ogilvy, VML, Hogarth, GroupM, and Burson. These agencies, contributing to nearly 90% of WPP’s revenue, are central to the company’s brand-building efforts.
Financial efficiency and returns
Structural changes, including the creation of VML and Burson and the simplification of GroupM, are expected to yield significant cost savings. These savings will support WPP’s growth ambitions and contribute to improved financial performance.
Financial outlook and commitment
Looking ahead, WPP sets medium-term targets that reflect its confidence in this strategy. These include over 3% LFL growth in revenue less pass-through costs and an improved operating profit margin. The 2023 outlook aligns with previous guidance, showcasing the company’s stability despite market challenges.
Investment in proprietary technology
WPP’s commitment to AI and data strategy is further evidenced by its planned annual investment of around £250m in proprietary technology. This move is not just about keeping pace with technological advancements but is a strategic step to stay ahead in the competitive landscape.
WPP’s strategy, under Read’s leadership, marks a significant shift towards a tech-driven future. By harnessing AI’s potential and focusing on creative transformation, WPP is well-positioned to navigate the complexities of the modern marketing world. This approach not only sets a new direction for WPP but also serves as a blueprint for how global agencies can thrive in an AI-augmented era.
