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A dark joke is spreading in the ad industry that a Kent-based manufacturer purchased four decades ago as a vehicle to construct a worldwide marketing powerhouse might survive longer than the empire it created.

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 business manifestation of Britain's stellar reputation for creative advertising.

WPP has housed some of the most esteemed agency networks, producing globally resonant campaigns such as Dove's Real Beauty, which disrupted conventional depictions of women.

Among WPP's iconic campaigns are the surprising combination of a music legend with a butter product, and decades of work for Coca-Cola, including the innovative idea to replace its logo on bottles with individual first names – a worldwide success still on shelves twelve years later.

But now, as WPP fights to halt a increasing departure of clients worth billions of pounds and address an existential race to equal the AI and data capabilities of rivals, there is hitherto unthinkable talk of a breakup.

"WPP dominated the world at one point, it was like the global powerhouse," said one industry executive. "It was representative of UK success and the country's status as the global home for advertising."

Era Ends on CEO Tenure

In August, a profit warning and dire forecast of revenue decline for this year sent WPP's shares plummeting to their weakest point since the 2008 financial crisis, marking the end of a difficult seven-year tenure 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 risk of being removed from the FTSE 100 index it joined almost three decades ago.

"One more earnings alert could force its exit and WPP is up against it," said one industry expert. "The situation WPP finds itself in now is almost unthinkable. WPP is highly exposed, it is potentially facing a acquisition or breakup."

For WPP's board, the final straw came when a significant customer informed the company that it was parting with its $1.7 billion global business. The chief executive resigned that Monday morning.

Strategic Shifts and Agency Restructuring

The former leader's strategy was to streamline a sprawling operation to create – or give the appearance of creating – a group suited 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 'old' advertising, it was a mess," said a former senior from a WPP agency. "He killed off the brands. Clients certainly didn't understand why treasured trophies had to go."

Others maintain that the former CEO has set the foundation for a turnaround and that WPP's decline was already apparent under the founder. Its market value fell substantially 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 rank and file over job cuts with AI positioned to take over swathes of the company's creative, media and data processes.

"The place where the fear is most pronounced is at junior levels, in entry-level positions where you come in and learn the business," said one staffer. "Grunt work, data, consumer insight: AI can write you a market analysis with creative embedded in it and market segmentation in 2.5 minutes. That would have been two weeks work for several graduate-level people."

Intense Rivalry

In the ad market, WPP is being heavily outgunned – 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 apparently tireless 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 significant market capitalisations.

New Leadership and Turnaround Efforts

WPP has asked a former tech executive to lead a recovery.

Earlier this month, she unveiled a five-year $400 million partnership with a tech giant to embed AI products into WPP's technology platform.

The new CEO, who has also worked at major media companies, is said by insiders to have been "customer-focused" in constant meetings in New York and London.

"She is not here to glaze anything," said a source who has spent time with the new CEO since she took over. "She is very clear-eyed about the challenges and is determined 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 "interest cover" – 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 shocking really. With the new CEO they have gone for the tech industry approach. She will be given a year to work out whether there is a technology recovery narrative here, if not the board will mandate her to break WPP up."

Market Sentiment and Outlook

Despite the immense pressure on WPP, there are signs that investors believe the business may have reached bottom and be set to bounce back.

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 increased their position 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 domino effect to winning and losing. The worry is that the decline is baked in. But change comes when you are on the precipice of disaster. I would never write WPP off."