WPP is on the Right Track for a Company Facing Generational Disruption
WPP has been making moves. In the last 12 months, the holdco hired Brian Lesser as CEO of GroupM, acquired data clean room company InfoSum, renamed GroupM WPP Media, launched its “large marketing model,” Open Intelligence, and announced it would bid farewell to its chief executive, Mark Read.
The easy response is to poke fun. “Agencies are screwed! Musical chairs on the Titanic!” And, indeed, if you were picking any business to start tomorrow with the goal of building a billion or $10 billion company, you probably wouldn’t pick a marketing agency. But these companies exist, they will continue to exist, and there will be winners and losers. So, let’s put on our marketing hack hats (mine is always on) and evaluate whether these moves make sense — i.e., whether WPP is putting together a compelling story as holdcos face generational disruption from AI. The short answer, I think, is yes. But first, let’s talk about Meta.
In 2021, Facebook rebranded as Meta. Mark Zuckerberg had effectively navigated the shift from desktop to mobile, building one of the leading ad businesses of the mobile era, but he didn’t get to own the hardware that drove that shift, and Meta is still paying the price for it. So, spying a potential new platform shift to the ‘metaverse,’ which would be ushered in by AR and VR technologies and devices, he made a bold bet. Meta would not play second fiddle to other conglomerates in the ‘metaverse era.’ It would own the software and hardware of the new world order.
In the wake of COVID (and more than a decade after the launch of the iPhone), Silicon Valley was waiting for its next generation-shifting technology, but it turned out not to be the metaverse. It was AI. ChatGPT exploded in usage in late 2022. The rest is the history we are currently living. Every aspect of our use of technology as consumers and businesspeople will be touched by AI. This — not the metaverse — is the moniker, the hill to own. For every company in technology and media, AI is the generational shift to navigate: be part of the change or be made obsolete.
Zuckerberg miscalculated in betting on the metaverse, but the thinking behind his bet was correct. If your industry is about to be remade by a generation-defining technology, you don’t half-ass your approach to that technology (which is what the vast majority of corporate bureaucracies will do). You bet the house on it.
Why? Essentially, the answer lies in marketing — on multiple levels.
First, you want to win the war for distribution. Despite talk of ‘no moats’ in the AI era, OpenAI’s existing distribution advantage and growing trust with consumers is their moat. I use ChatGPT for many hours every day; it is one of the most important technologies in my life, and it knows an immense amount about me both personally and professionally. I won’t soon give it up; the next thing will have to be twice as good. You don’t want to lose that early land grab.
Second, superior distribution — getting in front of the customers you need to reach, whether you’re a mass-scale consumer business or an agency/adtech business — begets superior reputations. Essentially, in the pivotal early days (or years) of generational technological disruption, your customers’ mental maps get redrawn. Their understanding of the few media platforms — or agencies or LLMs or consumer hardware makers — that matter gets reforged. That means marketing is never more important than in the early years of a new technological paradigm. Because you want to be on the shortlist when people think of whatever your category is — LLMs, DSPs, agencies. The trust you build now, when people are unusually open to reassessing how they do business (or, on the consumer side, how they shop, consume content, or use technology), may shape how your customers perceive you and your competitors for a decade.
My hunch is that this is the calculation the folks at WPP are making. Cynics abound, and many people will write off the entire agency business as moribund. But that’s lazy thinking. The marketing agency business will exist in some form — brand marketers do not want to be responsible for the whole of marketing themselves — and one of the existing holdcos will lead it. WPP is making a series of drastic changes to scream to the market, “We are prepared to remake ourselves to be your no. 1 reference point for AI-era marketing services. When you think ‘Agency that will help us maximize the impact of AI to drive efficiencies and business outcomes on our behalf, think of us.’”
That’s why you hire the tech-forward Lesser, rebrand the crown jewel of the holdco, make a change at CEO, and introduce a new term in “large marketing model.” Adtech people will groan at rebrands and neologisms. But they’re missing the point. The newness is the point. To take back the mantle of the most tech-forward holdco, which they’ve ceded to Publicis (see: WPP’s loss of Mars to Publicis just this week), and lead the agency business in the AI-driven Outcomes Era, WPP needs to do three things:
Signal they understand everything has changed and they’re willing to remake themselves for this new generation (as opposed to making incremental change).
Introduce new technologies — and terms! — that set the agenda for the next era of the agency business.
Show that their organizational restructuring, tech investments, and marketing moves are actually helping brands reimagine how they market themselves and leverage AI to drive results.
With their recent personnel and marketing changes, WPP is checking the first two boxes. Next up is the hardest box: execution. But you don’t get to execute — and execution means a whole lot less — if you don’t first chart a new direction and capture the industry’s attention. WPP has made an appropriately bold bet. As far as telling a story about their organization’s direction in the AI era goes, they are on the right track.
Now they get to do the hard part: bringing their vision to fruition.
