Disclosure: Mark Ritson’s MiniMBA course has been offered to Omnicom Oceania staff. Omnicom is a competitor to WPP.
When WPP posted its first-quarter numbers last week, one line did all the talking. Net revenue down 6.7% like-for-like. Its key unit WPP Media is down 8.5%.
The company described this performance, with commendable composure, “ahead of expectations.” Which tells you everything about the expectations now governing the big end of advertising.
The more instructive story isn’t the revenue decline. It’s margin.
WPP’s full-year 2025 headline operating margin came in at 13%, down from 15% in 2024.
Two hundred basis points in 12 months—the kind of compression you associate with recessions or category collapse, not with a company that has a turnaround strategy in-market.
The Elevate28 strategy, unveiled in February, promises around $675 million in gross annual savings by 2028 at a cash cost of around $540 million to deliver. CFO Joanne Wilson told analysts that staff bonuses suppressed in 2025 will need to be rebuilt through 2026. That cuts both ways: employees get paid properly again, but the lever WPP used to protect margin last year is now spent.
On the Q1 call, Adrien de Saint Hilaire of Bank of America asked the question every CMO should be asking. Revenue with WPP’s top 25 clients was down low single digits even excluding losses.
What drove the decline? Reduced scope of work, fee pressure, or outright budget cuts?
The answer determines whether WPP has a cyclical problem or a structural one
Scope reductions are cyclical: clients buying less of the same thing. Budget cuts are cyclical: economies contract, marketing contracts with them.
Fee pressure is structural: clients paying less for the same thing. That is a different animal entirely. It doesn’t respond to patience or strategy decks.
The answer, given on the Q4 2025 call, from Cindy Rose herself, confirmed it was all three—and that WPP anticipates “some downward pricing pressure from AI productivity,” which it plans to offset through cross-selling and capturing more of clients’ addressable spend. Translation: fees are falling, and the plan is to win volume elsewhere in the client’s wallet to compensate.
The numbers make the case plainly. On a like-for-like basis, gross revenue declined 4.0%, while net revenue declined 6.7%.
Pass-through costs—the media and production money flowing through WPP’s books to third parties—are holding up better than the agency-fee line. Clients are still spending. WPP is just earning less per dollar of that spend.
WPP is winning business too: the U.K. government media account, Reckitt, Estee Lauder, Jaguar. Revenue is still falling. Winning accounts while revenue drops is the diagnostic signature of a business defending share by cutting price. Every account won on tighter terms resets the floor for the next pitch.