WPP has been removed from the MSCI United Kingdom Index, a finance industry index that is often used to help investors compare global stock market performance, compare portfolio returns and build globally diversified investment strategies.
The MSCI’s UK Index measures the performance of large and mid-market capitalisation businesses in the UK. Although the index is not solely tied to the market capitalisation of businesses, market cap does play a significant part in whether it remains on the index.
As of the end of October, MSCI listed the smallest market cap of any business on the UK index as US$3.25 billion (AU$4.97 billion) and the largest at US$245.39 billion (AU$375.91 billion). The FTSE 100 lists WPP’s instrument market cap at £3.01 billion (AU$6.07 billion).
For context, the Commonwealth Bank has a market cap of AU$294.37 billion (or around US$192 billion), and the largest pure media business is News Corp with a market cap of AU$22.36 billion (US$14.62 billion).
WPP was removed from the index, which is run by Morgan Stanley, on 5 November, alongside 63 other businesses around the world.
Being removed from the MSCI is the latest piece of bad financial news for the currently embattled holding company. Since the start of the year (and at the time of writing) WPP’s share price has dropped by nearly two-thirds on the back of successive large client departures and changes to its global leadership.
In March, Coca-Cola moved its North American media account to Publicis from WPP, an account thought to be worth around AU$1.06 billion. In June, WPP’s EssenceMediacom lost Mars’ global media worth US$1.7 billion (AU$2.58 billion).
In March, however, WPP retained EA Sports’ global media and in May retained the global creative and media work for Coca-Cola (essentially everywhere but the US and Canada). It also recently won Reckitt’s European media account, covering 21 countries and is thought to be worth around AU$1 billion.
WPP Media’s performance in Australia has been bucking the trend of its US and European offices in recent years. Its agencies have won a series of new business, were B&T Media Agency of the Year winners the past two years (Wavemaker and EssenceMediacom) and scored highly in B&T’s Agency Scorecards (Mindshare with a 9).
WPP Media topped a recent RECMA qualitative ranking at a group level, with Omnicom and Publicis joint-second. OMD Australia secured the number one agency position, narrowly edging out EssenceMediacom.
That said, the delisting and these client losses are not a permanent death sentence for the business. Far from it, in fact. In this most recent round of additions and removals, Endeavour Mining found its way back onto the index after being removed in February. In November last year, Whirlpool (yes, the company that makes dishwashers) was removed from the US index, and Lyft was removed in May last year.
It’s also not as if the other holding companies are immune from a structural-level re-examination of the industry, either. Publicis’ share price is down 18 per cent year-to-date. Omnicom is down nearly 16 per cent, Interpublic’s down 11 per cent, Havas is down 19 per cent, M+C Saatchi is down a quarter, S4 Capital is down 37 per cent.
There is perhaps a chance that this might be the bottom for WPP. LinkedIn (as you’re likely well aware, reader) is awash with experts opining on the failures and shortcomings of WPP’s strategy, particularly vis-à-vis Publicis Groupe, which has rocketed into the unending holdco race for primacy in the market. Its market cap stands at €21.73 billion (AU$38.46 billion).
WPP’s ‘unnerving’ ride
In a recent article in The Drum, Mark Ritson described Rose’s determination that WPP needs to focus on AI, four years after ChatGPT was released to the market, as “unnerving”.
“It’s the digital equivalent of watching your grandfather learn to text – technically commendable, but further proof that he missed something important while the world moved on,” he continued, adding that Rose’s strong words during investor calls were unlikely to foster an esprit de corps in the global ranks.
“Internally, WPP’s culture is already miserable. Results are down and cuts are imminent. But when your new CEO tells the world, ‘Our recent performance is unacceptable and we are taking action to address this’ doesn’t really rally the troops,” he added.
But it hasn’t always been the case. Publicis’ rapid growth came off the back of contractions starting in the 2017 financial year and extending until the 2019 financial year, when it delivered successive double-digit declines in return. However, since then, CEO Arthur Sadoun (appointed chair and CEO of the Groupe in January 2017, officially taking control in June that year) has put the business on the front foot.
WPP’s new CEO Cindy Rose, meanwhile, has been in her role for less than six months. She’ll be issuing a strategy update to the market in the first quarter of 2026. How that strategy takes shape remains to be seen, but her technology background, with stints at Microsoft and others, is already starting to show up.
Its WPP Open Pro creative self-source tool may sound like the death knell for agencies as a whole. When a people-focused business offers an option that, in effect, eschews the people, one unkind observer might wonder why the people are needed. B&T understands that WPP has received a strong number of enquiries from current and potential clients about Open Pro.
Not long before, WPP announced a five-year expansion of its partnership with Google to bring more cloud computing and AI technology into the holdco’s fold, as well as “cultivating the essential skills to transform marketing as we know it”. In September, Rose announced a raft of senior leadership changes and promised the market that she would create an “army of AI super users” to make the most of the rapidly cresting technological changes.
Overnight, Campaign revealed that Rose had drafted in PowerPoint pros McKinsey to advise on its looming strategy review. WPP’s senior leadership is leading the review, and it is understood that McKinsey’s management consultants are helping to “facilitate and stress-test” the planning for the new strategy.
Using consultants in this manner is not unusual, and WPP reportedly used McKinsey for advice on strategy in 2020. WPP Media also recruited Emily Del Greco, a former partner at McKinsey, to be its global chief operating officer in February.
That said, there is the chance that analysts do not necessarily know how to apportion and evaluate ‘creativity’ as it relates to share price. What is certain, however, is that there’s a long way to go for Rose and WPP.
