Decreased Client Spending and Stagnant Business Leads Cause WPP to Warn About Decreased Profits
In a recent update, advertising giant WPP has announced a significant downgrade in its 2025 revenue and profit forecasts, citing a combination of macroeconomic pressures, leadership changes, client losses, and lower-than-expected new business as the key reasons for this change.
The company's first half revenues are predicted to drop by 4.2% to 4.5%, with a steeper decline of 5.5% to 6% in the second quarter. This downward trend is primarily attributed to a marked slowdown in new business wins and increasing client losses to competitors, which compounded revenue pressure.
WPP's headcount of 108,000 dropped 3.5% in the first half of 2024, marking the loss of around 3,800 roles. The company is undergoing significant leadership changes, including the departure of CEO Mark Read and a broader reshuffle across its network and regions.
The dissolution of its flagship brand GroupM and restructuring efforts have introduced additional internal challenges and possible disruptions. Continued macroeconomic uncertainty and global market volatility have led to tighter client budgets and a more cautious approach to marketing and advertising spend.
In its July 2025 trading update, WPP revised its forecast for like-for-like revenue less pass-through costs to a decline of 3% to 5%, a significant downgrade from its previous expectation of flat to a 2% decline. Headline operating profit for the first half is expected to be £400–£425 million, down from £646 million a year earlier, reflecting a notable margin contraction.
The company also incurred one-off costs related to severance payments at downsized subsidiaries, further affecting profitability. Notable client losses this year include Mars' $1.7 billion media review, which moved to Publicis a few weeks later, and Coca-Cola's $700 million North America media business.
Despite these challenges, WPP's CEO, Mark Read, has been upping investment in the company's AI and data capabilities, acquiring data clean room platform InfoSum and spending £300 million annually on proprietary AI tool WPP Open. The company has also quashed breakup rumours and is focusing on cost reduction, long-term investment, and adapting to the current trading environment.
WPP's share price tumbled by 17.1% on the news at the time of publication, reaching its lowest levels since 2009, and was among the worst performers in the FTSE 100 index. The company's issues have primarily been with WPP Media, which underwent rebranding and unspecified layoffs earlier this year.
In summary, WPP's challenges stem from a combination of macroeconomic pressures, leadership changes, client losses, and lower-than-expected new business, all of which have led to a substantial downgrade in its revenue and profit outlook for 2025. The company is focusing on cost reduction, long-term investment, and adapting to the current trading environment in an effort to turn things around.
[1] WPP Trading Update, July 2025 [2] Financial Times, "WPP shares tumble as advertising giant downgrades forecasts," July 2025 [3] Reuters, "WPP downgrades 2025 revenue and profit forecasts," July 2025
- The trading update from WPP in July 2025 revealed a significant downgrade in their 2025 revenue and profit forecasts, which is attributed to factors including macroeconomic pressures, leadership changes, client losses, and lower-than-expected new business—all aspects that are integral to the company's finance and business sector.
- Amidst these challenges, WPP's CEO, Mark Read, is strategically investing in technology, particularly in AI and data capabilities, aiming to stay competitive in the rapidly evolving business and finance landscape.
