Credit:Towfiqu Barbhuiya via Unsplash
WPP is changing the way it charges clients to a more performance based system rather than traditional agency headcount-heavy billing.
The switch will be from a model seen as “unpredictable and episodic” to higher quality recurring revenue that can be linked directly to client success.
“A commercial model that is more closely linked to client outcomes will enable us, over time, to move away from time and materials and decouple revenue from headcount,” CFO Joanne Wilson told analysts in a marathon briefing on the company’s new strategy.
“Over time, this will support higher revenue per head and margin expansion.”
The company, suffering from client losses and last week revealing negative revenue growth for 2025, will restructure into four divisions, cut more costs and staff, and sell assets.
In a plan called Elevate28, WPP plans to get back to growth sometime in 2027 after GBP 500 million in cost savings, merging back office functions and consolidating leadership at global, regional and at market levels.
Cindy Rose, who took over as CEO six months ago, is ending WPP’s days as a holding company, when individual agencies ruled and owed allegiance only to themselves.
“Please don't underestimate the enormity of the change that we're making,” she told analysts.
“We're moving from hundreds of standalone operating companies to four operating units across four regions.”
However, it was hard not to get excited when you're a trusted growth partner.
“That implies a much wider scope of integrated services than we see today in a fragmented project-based agency world,” she said.
“Clients are increasingly buying integrated services across the full spectrum of marketing capabilities. This represents an expanded share of wallet growth opportunity for WPP.
“I see this trend continuing because clients want to optimise their total marketing investment, and the best way to do this is to work on an end to end agentic platform fueled by a common data model so that you can see exactly what's working and what isn't, and optimise your marketing investment in real time.
“That is, by the way, exactly the case that WPP Open (WPP’s AI system) is built to deliver.”
She gave the example of a US-based retail client wanting to optimise marketing investment to accelerate growth.
The use of WPP Open’s agentic capabilities to rebalance this client's investment resulted in a $300 million incremental sales uplift.
Rose acknowledged there would be some downward pricing pressure from AI-driven productivity gains but argued the shift to integrated, outcome-based relationships would more than compensate.
Outcome/performance-based pricing would mean fees tied directly to client business results such as sales growth.
And the new way to charge could include licensing/subscription fees. These would be recurring fees for platform access rather than per-head billing.
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