London‑based WPP announced an AI‑focused restructuring called Elevate28, sending its shares down 4.5% to a 18‑year low. The plan merges its creative agencies, trims £500 million in costs and cuts the dividend to fund AI development. If you’re watching the ad market, the move signals a rapid shift toward AI‑driven services.
Why WPP Is Acting Now
WPP’s leadership sees generative AI reshaping everything from media buying to creative production. Competitors have already leveraged AI to win key accounts, putting pressure on WPP’s traditional fee‑based model. The urgency stems from the need to stay relevant and protect its client base.
Elevate28: The AI‑Driven Turnaround Plan
Consolidation into WPP Creative
All 41 of WPP’s creative agencies will be folded into a single unit, WPP Creative. By unifying the brand, the firm aims to eliminate duplicated functions and deliver a cohesive AI‑enhanced offering to clients.
Cost Efficiency Targets
The strategy targets £500 million of annual savings—about 12% of operating expenses. Savings will come from technology‑led automation, renegotiated vendor contracts, and a streamlined workforce.
Growth Investment in AI
WPP will invest heavily in proprietary generative tools and partnerships with leading AI providers. The goal is to boost AI capabilities, driving revenue growth by 2027.
Key Actions and Timeline
- Merge agencies: Create WPP Creative as a single AI‑enabled brand.
- Cut costs: Achieve £500 million in annual savings through automation and contract renegotiation.
- Reduce dividend: Free up cash to fund AI development and potential acquisitions.
- Invest in talent: Hire AI specialists and upskill existing staff.
Investor Implications
The share price dip reflects investor concerns about the speed of AI integration and the impact of workforce reductions on creative output. You’ll want to monitor whether the cost cuts materialize without hurting client service quality. Analysts will focus on the pace of AI rollout and any signs of client retention or attrition.
Industry Insight
Advertising veterans note that consolidating creative output under an AI‑enabled brand is a textbook response to the commoditisation pressure from generative tools. The real test will be how quickly WPP can translate AI investments into differentiated client value, rather than merely automating existing processes.
Looking Ahead
If WPP can harness AI to deliver measurable performance gains, the cost cuts may be justified and the dividend could be reinstated from a stronger financial position. However, a stalled AI rollout or continued client loss could turn the restructuring into a costly distraction.
