WPP has announced plans to invest £250 million ($A480 million) in AI in 2024, while the holdco expects its 2023 earnings to come in at the top end of its previously issued guidance.
Ahead of Capital Markets Day in London, WPP’s AI announcement follows a similar €300 million ($A493 million) commitment by Publicis Groupe which was announced last week.
The London-based WPP laid its plans to drive growth by leveraging AI, tech and data. WPP has already made a number of investments in the field, having acquired AI specialist Satalia in 2021, and formed partnerships with Adobe, Google, IBM, Microsoft, Nvidia and OpenAI.
It will also be looking to expand the reach of AI tools through WPP Open, a business platform used to share data across the company.
In addition to the AI investment, WPP pre-released its 2023 earnings, with full results due in mid-February. The company expects to report 2023 revenue growth (less pass-through costs) of 0.9 percent, in line with the 0.5-1.0 percent guidance issued in Q3 2023.
Commenting on the AI move, WPP CEO Mark Read (lead image) said: “AI is transforming our industry and we see it as an opportunity not a threat.
“We firmly believe that AI will enhance, not replace, human creativity. We are already empowering our people with AI-based tools to augment their skills, produce work more efficiently and improve media performance, all of which will increase the effectiveness of our work. We also see opportunities to sell new AI-driven products and services to our clients and to capture more growth in areas like production.”
Read acknowledged the current economic headwinds but added: “While we had to navigate a more challenging environment in 2023, we see strong future demand for our services and are confident we can accelerate our growth over the medium-term.”
The firm is also targeting cost savings of £125 million ($A240 million) by 2025 via its consolidation measures, with 40-50 percent of those savings to be realised in 2024. In October, the company merged Wunderman Thompson and VMLY&R to form VML. And just last week, WPP merged two of its agencies, Hill & Knowlton and BCW, to form Burson.
