From a financial standpoint GroupM is WPP’s biggest business unit, accounting for 62% of the company’s revenue.  

WPP CEO Mark Read called the media arm “one of the strongest parts of our offering,” in remarks to analysts on Thursday. But he and GroupM management have concluded that “we can do better.” 

Which is why GroupM is undergoing a reorganization that will result in client facing agencies Mindshare, Mediacom and Wavemaker sharing back-office facilities and common product platforms that will free hundreds of millions in cost savings. Some of that savings will be poured into developing new capabilities designed to make GroupM more competitive than it is and further optimize client media plans and spending.  

WPP will hold an investor conference in January that will further detail the GroupM reorganization and strategic plans for the next three to five years. 

GroupM has been hit hard of late by spending pullbacks from its large technology clients—a major factor in the firm’s organic revenue decline in Q3, particularly in the U.S. which was down more than 4%. 

Read referred to comments by Meta executives earlier this week indicating that the company’s marketing spending is down 24% this year. Read predicted that spending by the tech sector will bounce back sometime next year. “They need to communicate,” Read said, to clients, customers and other constituencies.  

The firm has also acknowledged that China has seen a significant drop in spending this year and visibility is not great, Read said. “The macro remains cautious and uncertain” in the country.  

Going into 2024, Read acknowledged WPP will be facing some “headwinds” early in the year due to client losses this year. But he noted that GroupM won the PayPal global business earlier this week and said the pitch pipeline is strong with opportunities to make up some lost ground.