Artificial intelligence has already become “fundamental” to WPP Plc, the world’s largest advertising group by revenue, its CEO said, as image generators and chatbots fuel surging interest in the technology.
(Bloomberg) — Artificial intelligence has already become “fundamental” to WPP Plc, the world’s largest advertising group by revenue, its CEO said, as image generators and chatbots fuel surging interest in the technology.
“Clearly it’s a great use in our media business, where we can use it to find relevant audiences and measure the impact of our work,” Mark Read said by phone on Thursday. “We’re using it a lot creatively in our production processes to accelerate how we produce work and reduce the cost of doing that. So it’s pretty fundamental.”
Read said AI subsidiary Satalia has worked across clients and agencies after London-based WPP acquired it in 2021. He said the group has to build AI into everything it does, mentioning work such as a video for Nike Inc., which showed tennis champion Serena Williams playing past versions of herself.
He also said he’s been personally experimenting a lot with OpenAI’s ChatGPT.
“The best technology is like magic,” he said of the Microsoft Corp.—backed platform. “At the same time, is it perfect? No,” he added, “but it’s brought to life the potential of generative AI in a way that’s really captured people’s imagination.”
Read’s comments came as WPP forecast sales that will rise more than analysts anticipated in the coming year, indicating that companies will continue spending to reach consumers. Shares rose as much as 6.4% in London on Thursday.
Revenue excluding pass-through costs will increase between 3% and 5% in 2023 from £11.8 billion ($14.2 billion) this year, the London-based group said in a statement on Thursday. That’s better than the average analyst forecast for approximately flat growth, according to a Bloomberg survey. Margins will rise to about 15%.
Sales excluding pass-through costs rose 6.9% last year, at the high end of the company’s previous guidance.
WPP has been consolidating the group’s large stable of agencies while folding in new technology and announcing partnerships with the likes of TikTok Inc., Snap Inc. and Stripe Inc. Business bounced back following ad spending freezes during the Covid-19 pandemic. As China reopens from its lockdowns, WPP announced the opening of its third campus in the country earlier this month.
WPP’s spend on TikTok last year “more than doubled” compared to a year earlier, Read said, adding that the social media platform has helped train its people on how best to work with influencers and produce ads specific to the platform.
In an interview with Bloomberg TV on Thursday, Read said “Twitter seems to be a lot more stable the last few months than perhaps it was towards the end of last year,” adding that “I think clients want to start to look about how they can come back onto Twitter.”
–With assistance from Tom Mackenzie and Francine Lacqua.
(Updates with CEO comments from second paragraph)
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