WPP PLC, once the world's largest advertising group, is set to be removed from the UK's FTSE 100 index following a steep decline in its share price amid client losses and competition from artificial intelligence. This marks the end of an era for the company, which has been a mainstay of the British blue-chip index since 1998.
According to a statement released by index provider FTSE Russell on Wednesday, the advertising giant will be replaced by real estate firm British Land Co. after trading closes on December 19. This change directly reflects WPP's sharp decline in market standing.
This year, WPP's stock has plummeted by nearly two-thirds, reducing its market capitalization to approximately £3.1 billion and hitting its lowest level since 1998 in November. Removal from the blue-chip index could trigger further selling pressure as index-tracking funds adjust their holdings.
Against this backdrop, WPP completed a leadership transition in September, with former Microsoft executive Cindy Rose succeeding retiring CEO Mark Read. The company has also initiated a strategic review, acknowledging that it "has not adapted deeply or quickly enough to evolving client needs."
**Market Cap Erosion Sees WPP Exit FTSE 100** The removal from the FTSE 100 is a direct consequence of WPP's shrinking market capitalization. Bloomberg data shows that, as of Tuesday's close, WPP had fallen to 117th place among UK-listed companies by market value. Under FTSE Russell rules, a constituent ranked 111th or lower in quarterly reviews is automatically demoted.
Founded by Martin Sorrell, WPP was once the dominant force in global advertising, with a market cap peaking at around £24 billion in 2017. Today, it stands at just £3.1 billion.
Alex DeGroote, a media analyst, noted, "This is a significant moment—an era has truly ended. It's sad... A UK-based global industry leader falling out of the index is quite ignominious, with no clear path back."
**AI Threat and Client Losses Deliver Dual Blow** WPP's struggles stem from two core pressures: fierce AI competition and high-profile client defections.
Investors fear that the rise of AI tools may encourage large corporations to build in-house creative teams, reducing reliance on agencies like WPP. Meanwhile, tech giants like Meta and Alphabet (Google's parent) have entered the fray, offering automated ad-creation tools for small businesses.
On the client front, WPP suffered a major blow in June when it lost food giant Mars' $1.7 billion advertising account to rival Publicis. Other setbacks include Pfizer scaling back business since 2023 and losing Coca-Cola's North American contract this year. Amid operational pressures, WPP has twice downgraded its sales growth forecasts.
**New Leadership Faces Turnaround or Takeover Pressure** With challenges mounting, WPP appointed Cindy Rose as CEO in September, replacing Mark Read after his seven-year tenure. The former Microsoft executive swiftly launched a strategic review to address the crisis.
Analysts suggest Rose may have just a year to reverse the company's decline—or face potential breakup.
WPP's weakened state has also made it a takeover target. Reports in November indicated Havas Group had expressed interest in acquiring part or all of WPP, briefly spiking its shares on speculation. However, after Havas denied the claims, WPP's stock gave up all gains, failing to avert its FTSE 100 exit.
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