WPP decline eases as turnaround advances

WPP reported a slower decline in second-quarter trading as restructuring, cost reductions, and new account wins began to improve the advertising group’s performance.

Revenue less pass-through costs fell by 4.7% on a like-for-like basis during the first half of 2026, compared with a 6.7% decline in the opening quarter. The second-quarter decline narrowed to 2.8%, providing early evidence that the deterioration recorded during 2025 and early 2026 is moderating.

First-half revenue was £6.37bn, down 4.4% on a reported basis and 3.2% like for like. Revenue less pass-through costs stood at £4.75bn, representing a reported decline of 5.6%.

The group’s media business recorded a 5.4% like-for-like decline in first-half revenue less pass-through costs, although the second-quarter fall narrowed to 2.8%. WPP attributed the improvement to better spending trends among existing clients, a smaller effect from lost accounts, and easier comparative figures.

WPP Creative declined by 4.9% during the half, while WPP Production grew by 1.6%. The figures underline the uneven character of the recovery, with production activity expanding while the larger media and creative operations continued to contract.

The company has reorganised its principal businesses into a Global Integrated Agencies reporting segment, bringing WPP Media, WPP Creative, and WPP Production into a more unified structure.

WPP Creative has replaced legacy infrastructure with four regional profit-and-loss organisations and four streamlined delivery units. Management expects the changes to make it easier to combine capabilities, pursue integrated accounts, and reduce duplicated systems and management layers.

Common incentive structures are also being introduced to encourage collaboration between operating units that previously competed more independently. The success of that approach will depend on whether integration improves service without weakening specialist expertise or accountability.

WPP remains on course to deliver £100m of in-year savings during 2026 through its Elevate28 programme. The wider plan is intended to produce £500m of gross annualised cost savings by 2028, creating room for investment in technology, data, talent, and client services.

The group also expects more than £200m of proceeds from disposals during the year as it rationalises non-core assets. Further sales remain under consideration.

Technology is central to the turnaround. WPP is expanding its WPP Open operating platform and Open Intelligence data layer, while extending partnerships with Google, Meta, and Amazon Web Services.

The systems are intended to support creative production, media activation, consumer analysis, and automated workflows. Their commercial value will depend on whether they reduce delivery time, improve campaign performance, and strengthen client retention.

Artificial intelligence presents both an opportunity and a structural challenge for large agency groups. Automation can lower production costs and increase the speed of campaign development, but it also enables clients, specialist agencies, and technology businesses to perform work previously handled by traditional networks.

WPP’s response depends on combining client data, creative capabilities, media purchasing, and technology at a scale that smaller competitors cannot easily reproduce. Investment in platforms must translate into measurable outcomes rather than another layer of internal infrastructure.

The company reported first-half wins including consolidated assignments from Estée Lauder, Henkel, and Wendy’s. It also retained work for Tesco in the UK and central Europe, alongside accounts involving Skechers, Huawei, L’Oréal, Uber, and Deutsche Bahn.

New business performance remains critical because earlier client losses continue to affect revenue after the original account decisions. Large agency contracts can take several quarters to transition, meaning wins and losses frequently influence results well after they are announced.

The advertising market is also being reshaped by more cautious client budgets, changing media consumption, procurement pressure, and the concentration of digital advertising expenditure among major technology platforms.

Large networks are simplifying structures in response, but lower costs alone will not restore growth. Agencies must also demonstrate that their data, creative work, and media buying can deliver stronger results than clients could achieve through internal teams or smaller specialist providers.

WPP expects revenue less pass-through costs to decline by a low to mid-single-digit percentage during the second half, while maintaining a full-year headline operating margin forecast of 12% to 13%.

The outlook points to improvement rather than an immediate return to growth. The next stage of the turnaround requires the better second-quarter trajectory to continue while organisational changes and technology investment begin to produce sustained commercial gains.