WPP Faces Profit Slump Amid AI Challenges and Economic Uncertainty

WPP, the advertising giant, has cut its annual profit forecast after clients curtailed spending in June, compounding concerns about the company's capacity to handle AI-driven technological shifts amid rising economic uncertainty.

The announcement resulted in a 15% drop in WPP shares, reaching a 16-year low at 448 pence. Rival French firm Publicis, which surpassed WPP as the global leader last year, also experienced a reduction in share value by 2%.

According to WPP's Chief Executive Mark Read, who plans to step down by year-end, the clients' cautious outlook and reduced buying opportunities have significantly impacted the company. Despite efforts to streamline its media operations with AI and relaunch GroupM as WPP Media, the anticipated business improvements remain elusive. WPP anticipates continued trading difficulties into the year's second half, following client losses and challenges in key markets like China, compounded by the emergence of AI tools enabling clients to manage their marketing campaigns independently.

(With inputs from agencies.)