Under heavy pressure from performance, advertising giant WPP (WPP.US) will “change direction” at the end of the year

Zhitong Finance App learned that since WPP (WPP.US) CEO Mark Read will retire at the end of this year, one of the world's largest advertising agency groups has begun searching for a successor. Read, 58, has been in charge of the British company for about 7 years and has been with the company for more than 30 years, according to a statement released on Monday.

WPP, once the world's largest advertising agency, has been struggling to revive growth and streamline operations to deal with weak sales and bleak prospects. The global economic downturn has hit customer spending, particularly in Asia, and the rise of artificial intelligence technology to automate ad creation and distribution has raised concerns across the advertising industry.

In February of this year, WPP expects this year's sales to remain flat or fall, lower than analysts' expectations, and the stock price will fall in response; while rival Publicis Group expects an organic growth rate of between 4% and 5% this year.

WPP had previously restructured the brand to cut costs and announced plans to invest hundreds of millions of pounds in new technology, including building artificial intelligence capabilities.

Matthew Bloxham, senior industry analyst at Bloomberg Intelligence, said Read's retirement highlights “the challenge his successor faced in overcoming years of poor financial and stock price performance compared to competitors, and opening up the prospects for strategic and structural changes. The new leaders will need to redouble their efforts to streamline institutions, cut costs, and invest more in technology.”

WPP appointed Philip Jansen, former CEO of British Telecom Group, as its chairman in January of this year.

As of press time, WPP was down 1.43% in the premarket. The stock is down 24% cumulatively since this year.