WPP dealt blow as prime shoppers sound out rivals

Major clients at WPP are reaching out to rival companies to discuss potential marketing deals in another blow to the British advertising giant, The Mail on Sunday understands.

It presents a fresh hurdle to the company’s boss Cindy Rose as she pushes ahead with a turnaround strategy at the business expected to be unveiled in the coming months.

Rose, a former Microsoft executive who took over as chief executive in September, has launched a review of the business and in November brought in consultancy firm McKinsey to help reverse slumping profits and a falling share price.

At the time she said details of the review would be shared ‘early in the new year’.

But her promises have so far seemingly failed to convince WPP’s biggest clients, some of whom are putting feelers out to rival agencies to discuss potential deals for marketing projects.

Emails seen by The Mail on Sunday show senior executives at corporations including food and drink giants Nestle and Mondelez International, the owner of Cadbury, approaching bosses of rival companies to discuss working together on new projects.

Blow:  Major clients at WPP are reaching out to rival companies to discuss potential marketing deals

It is understood a senior executive at Unilever, the maker of Dove soap and Hellmann’s mayonnaise, has also been in contact with a competitor about potential collaborations.

The developments are likely to raise alarm bells at WPP, given the brands are some of its largest customers, with their contracts worth millions.

It piles even more pressure on the business after The Mail on Sunday last month revealed the ad giant was suffering an exodus of its top creative staff – with some leavers labelling the firm a ‘sinking ship.’

The situation has pushed WPP to drastic action in a bid to attract clients.

Industry sources said advertising bosses had been left gobsmacked after WPP won a sought-after marketing contract with British car-maker Jaguar Land Rover in December, saying the company had secured the win by undercutting rivals with an incredibly low bid.

‘They are going in with the lowest costs to try and win. Obviously, it’s a short-term public relations boost, but let’s see what it does to their profit margins,’ one executive told The Mail on Sunday. WPP suffered humiliation last month when it crashed out of the FTSE 100 index for the first time in nearly 30 years following a sharp fall in its share price, which has slumped by 58 per cent over the past five years.

Its business has been put under pressure as companies have trimmed back their marketing budgets and turned to artificial intelligence (AI) tools to produce their own adverts, relying less on agencies.

Last year’s results are already predicted to be gloomy for the business and will probably ramp up pressure on Rose to deliver quick results.

Profits for the year are expected to be £889 million –down from more than £1 billion in 2024 – while revenues are forecast to have slumped to £11.8 billion from £14.7 billion, according to data platform Refinitiv.

Claire Holubowskyj, at research service Enders Analysis, said the fact that clients were looking to other firms meant WPP needed to ‘show some results’ in 2026 if it wanted to reverse the decline.

‘They are getting better at communicating that things are changing, but the proof will be in the pudding when we see how the revenues are performing in six or 12 months time.’

She added that a break-up of the business was still a possibility if Rose’s turnaround failed to achieve results.

‘We can’t rule out a break-up. It may not be a full fragmentation but they haven’t recovered enough to remove that as a prospect,’ Holubowskyj said.

WPP declined to comment.