Latest news with #SirMartinSorrell
Irish Times
4 hours ago
- Business
- Irish Times
WPP chief steps down as advertising group struggles with rise of AI
WPP chief executive Mark Read is standing down from the UK's largest advertising group as it struggles with a near five-year low in its share price and an industry-wide upheaval caused by artificial intelligence. Mr Read's exit will end a more than 30-year career at WPP and leaves it looking for a new chief executive during one of the most turbulent periods for the industry. He will continue as chief executive until the end of the year while the board starts the search for a successor. Former BT boss Philip Jansen became chair of the group at the start of the year, sparking speculation about the future of Read. In an internal note to staff, Mr Read said 'there is never a perfect time to move on as CEO ... but this feels like the right time for me'. In a statement on Monday, Mr Jansen said Mr Read had 'played a central role in transforming the company into a world leader in modern marketing services'. READ MORE Read has sought to restructure and streamline the group's global operations and invest more in technology since taking over from Sir Martin Sorrell in 2018, but WPP's share price has halved during his tenure, taking its market capitalisation to about £6bn. Shares in WPP fell 1.3 per cent in early trading on Monday. People familiar with the move said it was Mr Read's decision to leave now, although he did not have a job lined up. He is expected to seek other roles in the tech, marketing or consumer industries. How to manage your pension in these volatile times Listen | 37:00 WPP last year lost its position as the world's largest ad agency by revenues to French rival Publicis, while its two largest US rivals – Omnicom and IPG – have announced plans to merge to create a single, North American advertising heavyweight. WPP is still Britain's biggest advertising group, with revenues of close to £15 billion (€18 billion) and more than 100,000 employees around the world. [ Advertising giant WPP sees 2023 revenue gains above analyst estimates Opens in new window ] Mr Read, who is 58 years old, took over from Mr Sorrell, who resigned after an inquiry into his workplace conduct. Mr Read has overseen the company as it has tried to reorientate its business to cope with the dominance of the advertising market by tech giants Meta and Alphabet. Social media and influencer content have become key marketing channels, while traditional advertising media such as TV have shrunk in importance. More recently, Read has pushed WPP to invest hundreds of millions of pounds in AI, which has threatened to shake up the advertising agency model by offering much quicker and cheaper ways to do labour-intensive creative and media planning work. More than 50,000 people now use WPP Open, its AI platform, to assist them with their work. Mr Read said in January that WPP needed to move on from a difficult period of restructuring and rebuild its network of businesses with AI at the centre. WPP last year sold its controlling stake in public relations group FGS to private equity group KKR for $767 million (€671 euro) in cash. In the internal note to staff, Read said the company 'needed to make many difficult decisions that were necessary to serve our clients better, simplify the company, build our culture and put WPP on a more solid financial footing'. He added: 'We have also lived through some of the most challenging external events of modern times, from the pandemic to the war in Ukraine, and navigated an increasingly polarised and difficult world ... However, I strongly believe that the future for WPP is a very positive one.' Media analyst Claire Enders said Read had initially been a 'steady pair of hands holding the ship together through hundreds of acquisitions and integrations', and then had overseen a 'complete simplification' as chief executive of the business. 'WPP has struggled against stronger headwinds than its peers, largely due to its UK history and listing,' she said. – Copyright The Financial Times Limited 2025
The Guardian
6 hours ago
- Business
- The Guardian
WPP chief Mark Read steps down as ad agency battles AI
The boss of WPP, Mark Read, has announced he will step down, as the advertising agency which was once the largest in the world struggles against the rise of AI and its shares lag at their lowest level in about five years. Read will leave WPP after more than 30 years, with just under seven spent in the top job. He will stay on as chief executive until the end of the year while the board starts to look for his successor. WPP's share price has shed about half its value under his leadership, as the company has struggled against the rise of AI tech that helps companies to automate the creation of adverts. The chair of WPP, former BT boss Philip Jansen, said Read 'played a central role in transforming the company into a world leader in marketing services'. Jansen, a City heavyweight, triggered speculation about Read's position as chief executive when he joined as chair at the start of the year. Last year the group lost its crown as the biggest ad agency in the world by revenue to its French rival Publicis. Omnicom and rival group Interpublic agreed to combine in a $13.3bn deal, compared with WPP's market value of £5.9bn. Read took over in 2018 from Sir Martin Sorrell, who bought a small Kent-based maker of wire baskets in 1985 and built it into the world's largest marketing services group. Sorrell left amid allegations of personal misconduct which he denied. Read has overhauled the group over the course of his tenure, merging agencies and selling off some businesses, which has helped cut net debt. However the shares have lost more than a quarter of their value in the past year alone, as tech companies such as Google, Meta Platforms and Amazon have become dominant advertising names in their own right. This month Meta, which owns Facebook and Instagram, said it will start helping advertisers fully create and target campaigns using AI tools, including images, video and text. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion Weakness in WPP shares had also prompted speculation that it could become a takeover target by a bigger rival or an activist investor hoping to shake up the business. Shares in WPP dropped by 2% in early trading on Monday after the news of Read's departure.
Daily Mail
5 days ago
- Business
- Daily Mail
Sir Martin Sorrell's ad agency hit by big tech marketing cutbacks
S4 Capital cut its annual turnover guidance on Wednesday as technology companies remained cautious amidst heightened uncertainty. Sir Martin Sorrell's advertising agency expects its like-for-like net revenues to decline by a low single-digit percentage figure in 2025, having previously anticipated them to be roughly similar to last year's levels. Sorrell said tech clients, which account for around half of S4's turnover, are prioritising spending on expanding their artificial intelligence capacity. A lower spend from one large customer is likely to mean comparable sales from the firm's tech services segment will be 'down more significantly', Sorrell added. By comparison, the former WPP boss forecasts like-for-like sales in S4's marketing services arm to be 'only slightly down'. Sorrell noted that trading in the opening five months of 2025 reflected the 'volatile global macroeconomic conditions' resulting from Trump's tariffs, US-China relations, the Ukraine war and Middle East tensions. He told investors: 'Once the levels of tariffs are negotiated and the impacts assessed, we believe clients will become much more selective about the geographies in which they operate in order to find growth and focus on implementing technologies, such as, but not only AI.' Despite this backdrop, S4 Capital continues to expect its operational earnings before nasties will be broadly close to 2024 levels. It additionally forecasts an improved performance over the second half of the year due to the timing of revenue from major new business wins, such as Amazon, General Motors, and T-Mobile. Among other contract wins this year are Samsung, Buscopan developer Opella, and Jack Dorsey's payments platform, Square. S4 Capital shares were 4.85 per cent higher at 27p on Wednesday morning, although they have still shrunk by more than 97 per cent from their peak four years ago. Sorrell founded S4 in 2018 after spending over three decades growing WPP into the world's biggest advertising business. The London-based company encountered significant difficulties in 2022 after delaying the publication of its annual results twice because of accounting issues. A Sunday Times investigation found S4's breakneck expansion had left the firm's finance team struggling to cope, with employees not accurately recording sales and MediaMonks, a subsidiary, failing to pay influencers and creditors on time. Following the scandal, S4 made redundancies, instituted stronger financial controls, and halted its aggressive strategy to grow through acquisitions. In the last financial year, the group's reported net revenue decreased by 13.6 per cent to £754.6million. And its losses skyrocketed from £14.3million in 2023 to £306.9million as poor trading conditions in the second half and the medium-term outlook following the completion of its budget led to S4 Capital declaring massive impairment charges.
The Independent
5 days ago
- Business
- The Independent
S4 Capital downgrades sales outlook as tariff woes hamper economic outlook
Sir Martin Sorrell's marketing firm S4 Capital has warned that annual revenues are set to fall amid customer caution as US tariff hikes cause global economic uncertainty. The group said like-for-like net revenues are expected to drop by low single percentage digits over the full year. It had previously guided for revenues to remain largely flat on the year before. The group flagged 'wider market uncertainty and significant volatility in global economic policy, particularly as a result of the US-imposed tariffs'. But S4 Capital said it still expects underlying earnings to be 'broadly' similar to 2024, helping shares lift 6% in morning trading on Wednesday. Sir Martin, executive chairman of S4 Capital and previous boss of marketing giant WPP, said: 'The global macroeconomic environment has become even more challenging in 2025. 'Assessing the impact of US-imposed tariffs has been added to the three key risks around US/ China relations, Russia / Ukraine and Iran /Middle-East. 'Clients, therefore, are likely to remain cautious.' He said the group would 'continue to focus on our cost base and will take further action to support profitability, if necessary'. 'We expect an improved performance in the second half of the year and a greater second half weighting than in the prior year, enhanced by the phasing of new business revenue, including wins already secured,' he added. The firm last month reported an 11.4% plunge in pro forma net revenues in the three months to March 31 and warned over ongoing cutbacks in tech spend. S4 Capital has cut its workforce by 8% to around 7,000, down from about 7,600 a year ago, as it looks to rein in costs in the face of more challenging trading.
Yahoo
5 days ago
- Business
- Yahoo
S4 Capital downgrades sales outlook as tariff woes hamper economic outlook
Sir Martin Sorrell's marketing firm S4 Capital has warned that annual revenues are set to fall amid customer caution as US tariff hikes cause global economic uncertainty. The group said like-for-like net revenues are expected to drop by low single percentage digits over the full year. It had previously guided for revenues to remain largely flat on the year before. The group flagged 'wider market uncertainty and significant volatility in global economic policy, particularly as a result of the US-imposed tariffs'. But S4 Capital said it still expects underlying earnings to be 'broadly' similar to 2024, helping shares lift 6% in morning trading on Wednesday. Sir Martin, executive chairman of S4 Capital and previous boss of marketing giant WPP, said: 'The global macroeconomic environment has become even more challenging in 2025. 'Assessing the impact of US-imposed tariffs has been added to the three key risks around US/China relations, Russia/Ukraine and Iran/Middle-East. 'Clients, therefore, are likely to remain cautious.' He said the group would 'continue to focus on our cost base and will take further action to support profitability, if necessary'. 'We expect an improved performance in the second half of the year and a greater second half weighting than in the prior year, enhanced by the phasing of new business revenue, including wins already secured,' he added. The firm last month reported an 11.4% plunge in pro forma net revenues in the three months to March 31 and warned over ongoing cutbacks in tech spend. S4 Capital has cut its workforce by 8% to around 7,000, down from about 7,600 a year ago, as it looks to rein in costs in the face of more challenging trading. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
