WPP begins search for new leader for AI era

• While WPP has undertaken major restructuring, including consolidating creative agencies and the media division, its market performance has lagged behind its peers.
• WPP was once the dominant holding company by revenue, but Publicis recently overtook it. IPG and Omnicom are poised to leapfrog both once their merger is finalized.

Zoom in: In his resignation note, Read referred to WPP as a "simpler, stronger business, serving four of the world's most valuable companies as their leading marketing partner." He also noted the company's investments in AI and the value of its people.

• But WPP has recently lost notable clients, including creative work from Starbucks to Stagwell and from Pfizer to IPG (later Publicis), and media buying in North America for Coca-Cola to Publicis. Paramount just dropped WPP as its media agency of record after more than two decades.
• Madison and Wall's Brian Wieser called Read's exit "unsurprising," in a Monday note, pointing to the business and stock performance as well as the recent appointment of a new board chair.
• Wieser said the key challenge ahead for WPP is its strategic direction, noting that the rise of automation and AI, a shift toward marketing services and principal-based buying will require "meaningful investments."

Zoom out: Read's upcoming departure comes as the agency model is being redefined.

• AI and automation are reshaping ad buying and creative execution and impacting the role of talent. Marketers are increasingly seeking outcome-based and performance-driven services versus traditional retainer fees.
• Adding to the industry's turbulence, Omnicom and IPG are set to merge in pursuit of scale and efficiencies. The deal is expected to put more pressure on simplification across agencies' portfolios and intensify competition for clients and talent.

The bottom line: Read's successor will inherit a more than 100,000-person behemoth going through a time of existential change.