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Ad holding company giant WPP created its first five-year plan to stabilize its business and hired McKinsey to help carry it out, according to people with direct knowledge.
WPP, along with the rest of the ad industry, has had significant losses during the pandemic.
A former WPP financial executive said that based on their conversations with WPP leaders, the plan is designed to promote investor confidence and emphasize WPP’s digital firms over its weaker traditional agencies. Another former executive speculated that weaker agencies would merge with their digital counterparts.
The five-year plan signals a departure from the past, when WPP ran its business on a quarterly basis and sometimes discussed long-term plans that weren’t formalized, the executive said.
When WPP CEO Mark Read came aboard in 2018, he introduced a three-year turnaround plan that focused on consolidation. He recently said he’s looking to start acquiring again in areas like e-commerce and marketing technology.
Former insiders said WPP’s biggest challenge now will be shifting from reducing costs to increasing revenue at a time when many top executives have left the company.
“The future of WPP is on the line, frankly,” said the financial executive.
A WPP spokeswoman declined to comment. McKinsey did not respond to a request for comment.
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