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A dark quip is making the rounds in the advertising world that a Kent-based manufacturer purchased four decades ago as a vehicle to build a worldwide marketing powerhouse might outlast the empire it produced.

For many years, the market leadership of WPP – with its one hundred thousand employees servicing global clients from Ford to Coca-Cola – stood as the corporate embodiment of Britain's renowned reputation for creative advertising.

WPP has housed some of the most esteemed agency networks, producing world-famous campaigns such as Dove's Real Beauty, which disrupted stereotypical portrayals of women.

Among WPP's most celebrated works are the unlikely pairing of a music legend with a dairy brand, and years of campaigns for Coca-Cola, including the brilliant idea to replace its logo on bottles with individual first names – a worldwide success still on shelves twelve years later.

But now, as WPP struggles to halt a increasing departure of clients worth massive sums and deal with an existential race to equal the AI and data capabilities of rivals, there is previously unimaginable talk of a split.

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

Era Ends on CEO Tenure

In August, a profit warning and bleak prediction of revenue decline for this year sent WPP's shares tumbling to their weakest point since the 2008 financial crisis, marking the conclusion of a challenging seven-year tenure as chief executive.

A market capitalisation 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 danger of being removed from the FTSE 100 index it joined almost three decades ago.

"One more earnings alert could push it out and WPP is up against it," said one industry expert. "The situation WPP finds itself in now is hard to imagine. WPP is extremely vulnerable, it is potentially facing a takeover or breakup."

For WPP's board, the final straw came when a significant customer informed the company that it was losing its $1.7 billion global business. The chief executive resigned that Monday morning.

Strategic Shifts and Agency Restructuring

The former leader's strategy was to streamline a complex organization to create – or give the impression of creating – a group suited for an AI future. The move saw the phasing out of some of the most renowned names in advertising.

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

Others argue that the former CEO has set the foundation for a turnaround and that WPP's decline was already apparent 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 cheaper and faster and has 70,000 employees using its technology system.

However, concerns are increasing among the general staff over job cuts with AI positioned to take over large portions 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. "Grunt work, data, consumer insight: AI can write 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."

Tough Competition

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 competitor 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 "previous leadership in his prime."

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

Fresh Management 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 determined to move fast to turn it around."

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 Future Prospects

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

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 boosted their stake 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 wary 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 unpredictable, there is a contagion to winning and losing. The worry is that the decline is baked in. But change comes when you are on the precipice of disaster. I would never count WPP out."