Business

WPP Profit Downgrade Rattles Ad Market Amid AI Disruption

Published

8 hours ago

July 9, 2025

It’s just turned July, but there are all the signs that the advertising industry could be on the cusp of an AI winter.

An unexpected profit warning from WPP sent the advertising agency’s shares down as much as 18% on Wednesday. Shares of rival ad groups, including Omnicom, Publicis, IPG, and Havas, were also down.

WPP said a combination of client losses, a slowdown in new business pitches, and pressured marketer caution amid economic uncertainty meant that its performance since the start of the year had been worse than expected. It forecast that its annual 2025 revenue would decline between 3% and 5%.

While some of WPP’s woes are specific to the company, analysts and other industry insiders told Business Insider the ad group faces challenges that apply to the broader ad agency market.

Madison Avenue is grappling with the advent of AI. The technology can offer agencies opportunities as they help clients figure out how to apply it to their businesses, but also threatens to streamline many of the services they offer, including the creation and placing of ads. These productivity gains also threaten to upend the traditional agency business model of charging hourly rates.

On Wednesday’s trading update, Mark Read, WPP’s outgoing chief executive, quoted data from the research company COMvergence, stating new business pitches so far in 2025 were at a third of the level they were at during the same period last year. Read said this reflected a lower level of marketer confidence, given the prolonged macroeconomic uncertainty. He added that the new business opportunities that are out there tend to be smaller than usual. COMvergence didn’t immediately respond to a request for comment.

Independent media analyst Alex DeGroote told BI that the sharp decline in new business pitches could be a sign of corporate clients replacing some agency services with AI solutions they can use in-house.

“The impact of AI on net new business is hard to quantify, but it is a clear downside risk in our view,” DeGroote said.

Last month, Barclays analysts downgraded the stocks of WPP, IPG, and Omnicom, citing the immediate risks to the agency business posed by artificial intelligence.

WPP’s CEO is leaving, and his successor will inherit a raft of challenges

Ad agencies haven’t been letting AI wash over them without a fight. The largest agency groups, like Publicis and Omnicom, have pledged to invest hundreds of millions in AI over the next few years as they adapt their businesses to harness the technology.

“Agencies and adtech companies thrive on complexity and fragmentation. If advertising is seen as hard to do well, they can charge a premium, whether direct or baked into proprietary products,” said Brian O’Kelley, founder of the sustainability-focused adtech company Scope3 and whose previous adtech company AppNexus received investment from WPP.

AI interfaces “just work,” and that’s a problem for advertising companies, O’Kelley added. He added that the rise of AI search is reducing traffic to publishers and brand websites alike, presenting a challenge to brands looking to get their messages across through online advertising.

For its part, UK-headquartered WPP said it plans to invest £300 million, around $407 million, annually in AI and other technologies. It recently announced an investment in Stability AI, the developer of the AI image generator Stable Diffusion. And it’s prioritizing WPP Open, an AI-powered platform that helps its employees do market research, spin up media plans, and create assets for campaigns using generative AI.

“WPP has the most advanced strategy of any holding company, but clients and investors aren’t waiting for them to finish their transformation,” said O’Kelley.

WPP has lost key clients during its recent slump, like Pfizer and Coca-Cola’s North America account. The company has undergone waves of restructuring in a bid to become more competitive — like the recent merging of its media agency brands to become WPP Media — but the changes and resulting layoffs have “come with some distraction to the business,” Read said on Wednesday.

That’s not to mention the distraction of Read himself announcing in June his exit from WPP this year after more than 30 years with the company. A successor has not yet been named.

Meanwhile, Publicis Groupe is flying high, having topped ad agency new business leagues; the Barclays analysts that recently downgraded the other agency groups, maintained their rating on Publicis, citing its recent strong performance.

Elsewhere, rivals Omnicom and IPG are due to merge to create the world’s largest advertising group — two seismic industry moves that have resulted in WPP dropping down the pecking order.

“It’s clear that more needs to be done to turn WPP’s future around, and while the hunt for a new CEO continues, it’s unlikely that WPP will regain its crown as the world’s biggest advertising agency,” said Aarin Chiekrie, an equity analyst at Hargreaves Lansdown, in a note to clients Wednesday.

Source link

Business

AI giant Nvidia makes history as first US$4t company

Published

2 hours ago

July 9, 2025

John Biers

Source link

Business

Heathrow to pipe ‘sounds of an airport’ around airport

Published

4 hours ago

July 9, 2025

Lucy Hooker

The hum of an escalator, the rumble of a baggage belt and hurried footsteps are all interspersed with snippets of the lady on the tannoy: “Boarding at Gate 18”.

The UK’s biggest flight hub plans to make your experience at the airport sound, well, even more like an airport.

In what may be a bid to overhaul its image after a disastrous offsite fire in March, or just a marketing spin for summer holiday flying, Heathrow says it has commissioned a new “mood-matching” sound mix, which will be looped seamlessly and played throughout the airport’s terminals this summer.

The airport says “Music for Heathrow” is designed to help kickstart passenger holidays by reflecting “excitement and anticipation”.

“Nothing compares to the excitement of stepping foot in the airport for the start of a summer holiday, and this new soundtrack perfectly captures those feelings,” claims Lee Boyle, who heads up the airport’s terminals.

Whatever the aim, it will raise questions over what additional background noises passengers require, when they already have the sounds of an airport – fussing children, people doing their last farewells into their mobile phone, last calls for late-comers – all around them.

The airport invited Grammy nominee “musician, multi-instrumentalist and producer” Jordan Rakei to create the soundtrack, which it says is the first ever created entirely with the sounds of an airport. However, Heathrow said the track also featured sounds from famous movie scenes, including passengers tapping their feet in Bend It Like Beckham and the beeps of a security scanner from Love Actually.

It is conceived as a tribute to Brian Eno’s album Music for Airports, released in 1979, which is seen as a defining moment in the growth of ambient music, a genre which is supposed to provide a calming influence on listeners, while also being easy to ignore.

“I spent time in every part of the airport, recording so many sounds from baggage belts to boarding calls, and used them to create something that reflects that whole pre-flight vibe,” said Rakei.

The recording also features passports being stamped, planes taking off and landing, chatter, the ding of a lift and the sound of a water fountain, which some people may appreciate as a source of ASMR or autonomous sensory meridian response. Fans of ASMR say certain sounds give them a pleasant tingling sensation.

Source link

Business

AFRICON empowers Western Region Business leaders with AI training

Published

4 hours ago

July 9, 2025

The Editors

Africon, Africa AI Consult, a leading artificial intelligence consultancy dedicated to accelerating digital transformation across Africa, recently launched a complimentary AI training program tailored specifically for business professionals in Ghana’s Western Region.

This initiative underscores Africon’s commitment to equipping local entrepreneurs and corporate leaders with essential AI skills needed to enhance productivity and maintain a competitive edge in today’s rapidly evolving technological landscape.

The Free AI Masterclass Workshop took place on July 1, 2025, at Prof. Emeritus Mireku-Gyimah Hall, Hotel De Hilda in Tarkwa, and on July 3, 2025, at the Conference Hall, Takoradi Mall.

The sessions attracted business leaders from various industries, all eager to explore and harness the power of AI tools including ChatGPT, Gamma, and NotebookLM.

Participants engaged in practical, hands-on training designed to demonstrate real-world applications of AI in business operations, marketing, and strategic decision-making.

Organized in partnership with Adansi Travels and Vaurse, the workshops reinforced Africon’s mission to extend AI knowledge and impact across key regions. Attendees expressed high praise for the sessions, noting how the training dispelled misconceptions about AI and highlighted its tangible benefits in daily business activities.

As part of its Corporate Social Responsibility (CSR) efforts, Africon also offers free monthly virtual AI training sessions, alongside paid AI Masterclasses available both online and in-person.

The next paid in-person class is scheduled for July 18, 2025. Interested participants can register and find more information at www.africon.ai.

Africon continues to build a community of AI-savvy professionals poised to lead Africa’s digital future, empowering businesses to unlock efficiencies, drive growth, and compete globally.

About Africon

Africon is a premier AI consultancy dedicated to empowering African businesses through innovative AI solutions, training, and strategic partnerships. By fostering the adoption of AI technologies, Africon helps organizations unlock new efficiencies, stimulate growth, and remain competitive in the global marketplace.

DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.

Source link