Advertising Empire WPP is deeply mired in client loss + AI impact, profit warning followed by the sudden appointment of Microsoft executive Ross as CEO
British advertising giant WPP has appointed Cindy Rose as the new CEO, succeeding the outgoing Mark Read. This appointment comes after WPP issued a profit warning, facing challenges of client loss and the impact of AI. Rose has nine years of experience at Microsoft and possesses expertise in digital transformation. WPP's stock price recently fell to a 16-year low due to the profit warning, but has rebounded somewhat following the announcement of the new CEO. WPP is working to address the issues of reduced client spending and fewer new business opportunities
According to Zhitong Finance APP, British advertising giant WPP (WPP.US) announced on Thursday the appointment of board member Cindy Rose as the new CEO. Just a day earlier, the group issued a significant profit warning, highlighting the severe challenges it currently faces. In this context, Rose, a former Microsoft executive, has been called upon to lead WPP out of its predicament.
WPP stated that Rose has been a board member since 2019 and will succeed outgoing CEO Mark Read on September 1st—Read's departure comes four months earlier than expected.
On Wednesday, WPP significantly lowered its profit expectations, causing its stock price to drop to a 16-year low; however, on Thursday, the stock rebounded, rising 3.58% in pre-market trading to $30.39 as of the time of writing.
Rose served at Microsoft for nine years, rising to the position of Chief Operating Officer for Global Enterprise, and previously led Microsoft's UK operations. Before joining Microsoft, she worked at Vodafone (VOD.US) and Virgin Media.
WPP Chairman Philippe Jansen commented that Rose has helped large global companies complete digital transformations, including creating new business models and revenue streams using artificial intelligence.
"The industry is undergoing fundamental changes, and the macroeconomic environment is full of uncertainties. Her expertise in this area will bring tremendous value to WPP," he said.
WPP, under Rose's leadership, is in deep trouble: it has lost several major clients, client spending has significantly reduced, and new business opportunities are dwindling. These issues collectively prompted WPP to lower its profit expectations, leading to a 19% drop in its stock price on Wednesday.
Last year, WPP lost its title as the world's largest advertising group, overtaken by France's Publicis. Additionally, the transformative impact of artificial intelligence has put WPP under significant pressure—AI allows clients to independently create and manage more marketing activities.
In response, Rose stated, "We have built and will continue to strengthen our market-leading artificial intelligence capabilities, while also having an unmatched reputation for creative excellence and a top-tier client roster."
