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A dark joke is circulating in the advertising world that a UK-based basketmaker acquired four decades ago as a vehicle to build a worldwide marketing powerhouse might outlast the conglomerate it produced.

For many years, the market leadership of WPP – with its 100,000 employees catering to international brands from Ford to Coca-Cola – stood as the corporate embodiment of Britain's renowned reputation for creative advertising.

WPP has hosted 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 iconic campaigns 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 in stores twelve years later.

But now, as WPP fights to stem a increasing departure of clients worth massive sums and confront an existential race to match the AI and data capabilities of rivals, there is hitherto unthinkable talk of a split.

"WPP ruled the world at one point, it was like the global powerhouse," commented one marketing leader. "It was symbolic of UK success and the country's status as the world center for advertising."

Chapter Closes on CEO Tenure

In August, a earnings alert and bleak prediction of revenue decline for this year sent WPP's shares plummeting to their lowest level since the 2008 financial crisis, marking the end of a challenging seven-year period 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 falling out from the FTSE 100 index it joined almost three decades ago.

"Another profit warning could force its exit 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 last trigger came when a major client informed the company that it was losing its $1.7 billion global business. The chief executive resigned that Monday morning.

Operational Changes and Brand Consolidation

The departed CEO's strategy was to simplify a sprawling operation 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 renowned names 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 argue that the departed leader has laid the groundwork for a turnaround and that WPP's fall was already apparent under previous leadership. Its market value fell significantly 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 more quickly 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 present is at junior levels, in starting roles where you come in and learn the business," said one staffer. "Grunt work, data, consumer insight: AI can write you a competitive review with creative included in it and market segmentation in 2.5 minutes. That would have been a fortnight's labor for several graduate-level people."

Tough Competition

In the ad market, WPP is being significantly outperformed – 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 seemingly indefatigable 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 substantial market capitalisations.

Fresh Management and Recovery Plans

WPP has asked a ex-Silicon Valley leader to lead a recovery.

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 leading telecommunications firms, 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 "debt servicing capability" – 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 Silicon Valley touch. She will be given a year to work out whether there is a tech turnaround story here, if not the board will mandate her to break WPP up."

Market Sentiment and Future Prospects

Despite the immense pressure on WPP, there are signs that investors believe the business may have reached bottom 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 primary earnings source 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 opportunity 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 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 count WPP out."