WPP reported a fall in pretax profit for 2023 after booking a large impairment, but said that its AI-powered platform WPP Open is rapidly growing its number of customers, WSJ reports.
WPP reported Q4 revenues inched ahead 0.3 percent to $4.1 billion as CEO Mark Read closed a year that he said was more challenging than expected due to cutbacks, mainly by technology clients.
The tech and digital services sector, which accounts for 17.5 percent of WPP revenues, fell 6.9 percent during 2023.
The world’s largest advertising agency reported $4.5 billion of new business in the year, down from $5.9 billion in 2022 as signs of strain in the advertising market started to show. However, the company went on to say its current pipeline of new potential new business remains higher year-on-year.
WPP launched VML in January 2024, following the merger of VMLY&R and Wunderman Thompson with senior leadership appointed. GroupM’s simplification plan on track, it said. Its PR firm Burson, created from the merger of Hill & Knowlton and BCW, scheduled to launch in July.
Mark Read, chief executive officer of WPP, said:
“At our recent Capital Markets Day we detailed our strategy to capture the opportunities of AI, data and technology, while harnessing the full power of our offer to clients, building world-class agency brands, and driving strong financial returns through efficient execution.
“AI will be fundamental for our business and we are embracing the opportunities that it presents, putting it at the heart of our operations and our work for clients. Our AI-powered platform, WPP Open, is now being used by more than 30,000 people across WPP with growing adoption by our clients.
“While 2023 was more challenging than we expected due to cuts in spending by technology clients, we delivered a resilient performance for the year with 0.9 percent like-for-like growth and a 0.2 point improvement in our headline operating margin at constant currency. This was driven by disciplined cost control, while continuing to invest in AI, data and technology.
“Our net new business of $4.5 billion in 2023 included major new assignments with clients such as Allianz, Krispy Kreme, Mondelēz, Nestlé, PayPal and Verizon and reflects a stronger year-on-year performance in the fourth quarter.
“We are optimistic about the strategic opportunities ahead of us and are confident that we can deliver accelerated and increasingly profitable growth over the medium term.”
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