WPP will bet the next phase of its strategy on leveraging artificial intelligence (AI), data, and technology for growth, improved margins, and enhanced cash generation, earmarking around £250m (AUD$480m) annually to support its investment plans.

The holdco's strategy is built on four key pillars: leading through AI, data, and technology; unlocking the full potential of creative transformation; building world-class, market-leading brands; and executing efficiently to drive strong financial returns.

The company's AI strategy is based on its acquisition of Satalia in 2021, organic investment in AI, client technology and data, and partnerships with tech giants such as Adobe, Google, IBM, Microsoft, Nvidia, and OpenAI.

WPP Open, the company's common technology platform, is powered by proprietary AI models and has over 28,000 users across WPP and key clients including L'Oreal and Nestle. The company aims to expand its client relationships by leveraging its global scale, integrated offer in creative, media, production and PR, and capabilities in growth areas such as commerce, influencer marketing and retail media.

The company is also consolidating its agency play through six agency networks - AKQA, Ogilvy, VML, Hogarth, GroupM and Burson - which represent close to 90% of WPP's revenue less pass-through costs. WPP aims to deliver growth and structural cost savings through the creation of VML and Burson and simplification of GroupM, with expected annualised net cost savings of c. £125m in 2025. WPP announced last week the merger of its two largest communications agencies, Hill & Knowlton and BCW, to form Burson, its new worldwide communications brand.

WPP CEO, Mark Read, emphasised the power of brands, creativity and investment in marketing to drive growth for clients and to build significant value.

"The past three years have demonstrated the power of brands, creativity and investment in marketing to drive growth for clients and to build significant value. Research demonstrates that those companies with the strongest brands deliver the highest returns to shareholders," he said.

Read also highlighted the transformative role of AI in the industry. "AI is transforming our industry and we see it as an opportunity not a threat. We firmly believe that AI will enhance, not replace, human creativity," he continued.

"We are already empowering our people with AI-based tools to augment their skills, produce work more efficiently and improve media performance, all of which will increase the effectiveness of our work. We also see opportunities to sell new AI-driven products and services to our clients and to capture more growth in areas like production.

"Our long-standing investments in AI, including our AI-powered platform, WPP Open, and our acquisition in 2021 of Satalia, a leading UK AI company, are at the heart of our competitive offer. An ongoing annual investment of 250m in data and technology to support our AI strategy is included in our 2024 financial plans."

The bullish investments were announced as WPP tempered expectations of financial results in the year ahead. WPP's updated medium-term targets are 3%+ LFL growth in revenue less pass-through costs, along with 16-17% headline operating profit margin. WPP predicts 2024 LFL revenue less pass-through costs growth of 0-1%.

Despite the challenging environment in 2023, Read expressed confidence in the future demand for WPP's services and the company's ability to accelerate growth over the medium-term.

"Today, the team and I look forward to demonstrating our commitment to leadership through innovation and sharing our plans for improved and sustained returns for our people, our clients, our communities and our shareholders."