The news: WPP reported another tough quarter, with full-year 2025 revenues down 8.1% and Q4 revenues down 8.3% YoY. Revenues excluding pass-through costs declined 10.4% for full-year 2025 and 10.1% in Q4.

The results extend WPP’s run of underwhelming results and add skepticism around its turnaround efforts. CEO Cindy Rose noted the holdco’s underperformance and revealed a $676 million cost-cutting plan. Under its new Elevate28 strategy, WPP will restructure into four divisions: WPP Media, WPP Enterprise Solutions, WPP Production, and the newly launched WPP Creative.

Why it matters: Topline declines suggest that WPP’s efforts to date—including a stronger push toward AI integration—have yet to materially change its trajectory. The results reflect broader challenges across the agency landscape.

• AI is directly threatening traditional agency revenue streams. Marketers are spending less on agencies and relying on AI to automate executional work, forcing agencies to rapidly pivot toward new services to defend their relevance.
• Agencies are also feeling pressure from tech platforms like Google, Meta, and Amazon, that offer self-service, AI-assisted ad tools to lower barriers of entry for brands.
• Because brands are increasingly turning to in-housing and self-serve platforms, media ad spending is growing at a faster rate than agency holding company revenue growth. Advertisers are spending more, but that growth isn’t translating into agency revenues—pushing agencies to offer their own native AI tools to compete.
• But even as agencies look to advance their services and build AI tools, they are struggling to adopt AI due to skill gaps, lack of formalized strategies, and unclear ROI.

Implications for agencies: WPP’s situation is forcing agencies and holdcos to question what differentiates them in an era where automation is reducing reliance on the traditional advertising model and brands increasingly expect integrated solutions.

For agencies, AI is compressing the amount of human input required for media planning, creative iteration, and reporting. This means agencies must redefine their value around insight, orchestration, and high-level problem-solving rather than production scale.

For WPP, cost reductions may protect its margins in the short term, but don’t necessarily solve its growth challenges. Meanwhile, repeated restructuring is causing uncertainty for clients and talent alike, and WPP is still racing to build its AI capabilities to match more established rivals.