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A cynical joke is circulating in the advertising world that a UK-based manufacturer acquired four decades ago as a foundation to construct a global advertising giant might survive longer than the conglomerate it produced.

For a long time, the financial success of WPP – with its 100,000 employees servicing global clients from Ford to Coca-Cola – stood as the business manifestation of Britain's stellar reputation for innovative marketing.

WPP has housed some of the most renowned agency networks, producing globally resonant campaigns such as Dove's Real Beauty, which disrupted stereotypical portrayals of women.

Among WPP's greatest hits are the surprising combination of a music legend with a dairy brand, and years of campaigns for Coca-Cola, including the brilliant idea to swap its logo on bottles with personal names – a global phenomenon still on shelves twelve years later.

But now, as WPP battles to stem a increasing departure of clients worth billions of pounds and confront an existential race to equal the artificial intelligence and analytics power of rivals, there is previously unimaginable talk of a breakup.

"WPP ruled the world at one point, it was like the British empire," noted one industry executive. "It was symbolic of UK success and the country's status as the world center for advertising."

Era Ends on Leadership Tenure

In August, a earnings alert and dire forecast of revenue decline for this year sent WPP's shares plummeting to their weakest point since the 2008 financial crisis, marking the conclusion of a difficult seven-year period as chief executive.

A stock market value of just £4 billion – compared with its £25 billion valuation eight years ago, when WPP was the world's largest marketing services company – has left the business at risk of falling out from the FTSE 100 index it joined almost three decades ago.

"Another profit warning could force its exit and WPP is facing challenges," said one industry expert. "The situation WPP finds itself in now is hard to imagine. WPP is highly exposed, it is potentially facing a acquisition or breakup."

For WPP's board, the last trigger came when a major client informed the company that it was parting with its $1.7 billion global business. The chief executive stepped down that Monday morning.

Strategic Shifts and Brand Consolidation

The departed CEO's strategy was to simplify a complex organization to create – or give the impression of creating – a group fit for an AI future. The move saw the elimination of some of the most famous brands in advertising.

"It was a bashing and crashing of names that were linked to 'traditional' advertising, it was a chaos," said a ex-executive from a WPP agency. "He eliminated the brands. Clients certainly didn't understand why treasured trophies had to go."

Others contend that the departed leader has set the foundation for a turnaround and that WPP's decline was already evident under previous leadership. Its market value fell substantially over the founder's last year in charge.

WPP has been investing £300 million annually in AI tools to enable it to make ads more cost-effective and more quickly and has 70,000 employees using its technology system.

However, concerns are mounting among the general staff over job cuts with AI poised to take over swathes of the company's creative, media and data processes.

"The place where the anxiety is most pronounced is lower down, in entry-level positions where you come in and learn the business," said one staffer. "Routine tasks, data, consumer insight: AI can generate you a market analysis with creative included in it and market segmentation in 2.5 minutes. That would have been two weeks work for two or three graduate-level people."

Intense Rivalry

In the ad market, WPP is being heavily outgunned – principally by a French competitor, which took its crown as the biggest ad group in the world by revenue last year.

The French rival has seen its share price increase almost 200% in five years, giving a market value of €21 billion. It is led by a apparently tireless leader who is described by more than one industry executive as reminding them of "the founder in his prime."

US-based rivals have each seen their shares appreciate just more than 50% over the same period, with significant market capitalisations.

New Leadership and Turnaround Efforts

WPP has asked a ex-Silicon Valley leader to engineer a turnaround.

Earlier this month, she unveiled a five-year $400 million partnership with a major technology company to embed AI products into WPP's technology platform.

The new CEO, who has also worked at major media companies, is said by insiders to have been "client-obsessive" in constant meetings in New York and London.

"She is not here to sugarcoat the situation," said a source who has spent time with the new CEO since she took over. "She is very realistic about the challenges and is committed to move fast to reverse the decline."

Given the state of WPP's business, analysts believe she may have only a year to save it. The previous CEO sold off assets including a market research group and used the proceeds to help pay down debt.

However, lower operating profits – down 35% year-on-year in the first half of 2025 – raise doubts about WPP's "interest cover" – a measure of a company's ability to pay down debt. Of more fundamental concern is an operating margin that fell from 11.5% in the first half of last year to 8.2% in the first six months of 2025. By comparison, the figure for its main competitor is just more than 18%.

"I cannot ever remember margins being anywhere near as low as that," said one analyst. "It is alarming really. With the new CEO they have gone for the tech industry approach. She will be given a year to work out whether there is a technology recovery narrative here, if not the board will instruct her to break WPP up."

Market Sentiment and Outlook

Despite the significant challenges on WPP, there are signs that investors believe the business may have hit its nadir and be set to bounce back.

WPP Media, which manages more than $60 billion in global media investment in campaigns for clients, has always been the revenue and profit driver for the company. WPP Media on its own is worth more than the approximate £7.5 billion enterprise value of WPP, which includes its debt.

A number of investment funds have increased their position in WPP, sensing a bargain as change looms under new leadership, but the question is whether the ad giant can convince clients and investors quickly enough.

"Investors are scared of being on the wrong side of AI," said one financial source. "It is the biggest theme in markets globally. It feels as though WPP is on the wrong side of that trade at the moment.

"Advertising clients are fickle, there is a contagion to winning and losing. The worry is that the decline is inevitable. But change comes when you are on the precipice of disaster. I would never write WPP off."