LONDON: WPP, the world’s biggest advertising agency, delivered a sobering performance in the first half of 2025, slashing its interim dividend by 50 per cent as profits tumbled and clients tightened their belts.
The London-listed giant reported headline operating profit of £412m for the six months to June, down 36 per cent from £646m a year earlier. Revenue less pass-through costs—the industry’s preferred measure—fell 4.3 per cent on a like-for-like basis to £5.03bn.
The company cut its interim dividend to 7.5p per share from 15p previously, with the board citing the need to give incoming chief executive Cindy Rose “room to review the group’s strategy and capital allocation policy”.
Mark Read, who steps down as chief executive on 1 September after seven years at the helm, acknowledged the difficulties. “It has been a challenging first half given pressures on client spending and a slower new business environment,” he said.
The results underscore the advertising industry’s struggles as companies slash marketing budgets amid economic uncertainty. WPP’s top 25 clients managed only flat growth, while key sectors including consumer goods and automotive weakened in the second quarter.
WPP has made “significant progress” repositioning its media division, which replaced GroupM in May as part of chief executive Read’s drive to simplify the sprawling conglomerate. The unit, now called WPP Media, has undergone substantial restructuring to make it more client-focused.
The company expects severance action taken in the second quarter alone to generate more than £150m of annual cost savings from 2026. Headcount has fallen 3.7 per cent since the start of the year to 104,000 people.
Despite the gloom, WPP continues to invest heavily in artificial intelligence and data capabilities. Usage of WPP Open, its AI-powered marketing platform, has surged, with 85 per cent of client-facing staff now using it monthly, up from 60 per cent in March.
The company also completed the acquisition of InfoSum, a data collaboration platform, and launched Open Intelligence, an AI tool designed to predict audience behaviour.
Looking ahead, WPP expects like-for-like revenue less pass-through costs to decline between 3 per cent and 5 per cent for the full year. Headline operating profit margin is forecast to drop by 50 to 175 basis points.
The company’s performance varied widely by region. North America, WPP’s largest market, saw revenue less pass-through costs fall 2.4 per cent, while China plunged 16.6 per cent amid persistent macroeconomic pressures.
At the prestigious Cannes Lions festival in June, WPP was named creative company of the year, providing some cheer amid the financial turbulence. The group’s agencies secured 168 Lions, including a coveted Titanium Lion.
Average adjusted net debt stood at £3.4bn at the end of June, giving a debt-to-EBITDA ratio of 1.98 times—outside the company’s target range of 1.5 to 1.75 times.
Shares in WPP have struggled this year as investors fret about the advertising downturn and the company’s transformation efforts. The stock trades well below pre-pandemic levels, reflecting the challenges facing traditional advertising agencies in an increasingly digital world.
Rose, who joins from Microsoft, faces the daunting task of restoring growth while maintaining WPP’s position as the industry leader. Her strategic review will be closely watched by investors hoping for a clearer path forward for the advertising behemoth.
