It’s a major waypoint in the AI-hastened shift away from the ‘managed services’ model that has long been advertising’s staple. How will the market respond?
WPP Open Pro promises to remake the agency landscape. Will it?
In a pair of announcements over the last couple of weeks, WPP’s plan for a bounce-back has become clear.
First, new chief executive Cindy Rose made her first big statement: a partnership with Google that will see the marketing giant spending $400m on Google’s AI technologies. Then came the launch of WPP Open Pro, a self-serve platform that the holding company says “will empower brands of all sizes to plan, create and publish campaigns independently”.
Together, the announcements set out WPP’s stall for its positioning in advertising’s holding-company AI wars (wars in which it has been chasing rival Public’s enviable profitability).
A release makes the London-headquartered hold-co’s intentions for Open Pro clear: shoring up client retention from rivals trumpeting their own AI capabilities, while expanding its potential market. Declaring a “significant shift in the industry”, it says that Pro “enables WPP to service the evolving needs of its current client base and grasp the opportunity to increase its addressable market of brands that may not have previously had the resources to benefit from its expertise.”
The release lists “strategy, content creation and performance optimization” as capabilities; campaign adaptation and content personalization as use cases; and “smaller businesses, startups and growing brands” as potential clients.
The suggestion: a swath of business just became targets for WPP to serve more cheaply than ‘traditional’ agencies operating on a managed service model. In short, it may hasten the arrival of what Forrester principal analyst Jay Pattisall’s called an “existential threat” for advertising shops not ready to monetize around generative AI.
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Speaking to The Drum again today, Pattisall says that with Pro, WPP is clearly “stepping into the SaaS marketplace to better compete with software companies’, marketing service companies’ and ad manager self-serve tools”.
The firm’s eyes, Pattisall says, are as much on retaining enterprise clients as expanding into the SME space. Global advertisers now have generative and agentic AI pitches coming from every direction – direct from platforms like Amazon, Google and Meta; from their major tech partners like Microsoft and Adobe; and increasingly from their agencies. Pro, Pattisall says, will allow “enterprise clients access to self-serve tools to activate and localize campaigns while still working with WPP and its service teams”.
In the mid-market, Pattisall says, the target will be “clients who only need self-serve solutions”. For these clients, while Pro can legitimately claim to be the first offer of its kind from the advertising world, the move is about keeping pace with the ‘walled gardens’. “Open Pro is a direct answer to self-serve ad manager tools” already in operation at Google et al, Pattisall says.
And while the platform may not be groundbreaking (it is, after all, built on Google tech), Pattisall says that WPP has indeed built an AI offering with (for now) a clear point of difference from its advertising competitors. “The combination of WPP Open, Open Pro, the enterprise AI deal with Google for creative tooling and the InfoSum acquisition to power their data and intelligence gives WPP an end-to-end marketing stack, including self-serve. The last piece is something neither Omnicom Group nor Publicis currently offers. But the trick will be for Cindy Rose to connect the end-to-end capabilities to all the WPP companies and employees. The tech is there. The hard work of integration begins.
“Yes, WPP got to a self-serve solution before Publicis or Omnicom. But that’s likely to be short lived. WPP still needs to demonstrate how the Open stack and its federated data approach is superior to that of Publicis and Omnicom’s tech and identifier approach (Epsilon and Acxiom). It’s game time for WPP.”
For Gartner analyst Jay Wilson, the timing’s not surprising: by launching Pro now, WPP is getting ahead of the crumbling traditional agency business model. Across the board, he says, agencies “need to develop products and technologies that enable them to be less dependent on the traditional time and materials (fee-based) model, because that model is challenged at its core by AI.”
Holding companies especially, Wilson says, “are going to need to shift work from existing agencies or entities to new and emerging entities, or existing, lower cost entities.” Outgoing WPP chief exec Mark Read, Wilson says, noted salutary performances for Hogarth, its production shop, amid struggles elsewhere. “But that performance inherently comes at the cost of their premium agencies. But it’s more viable than losing that business entirely. The same may be said of WPP Open Pro, but in this case, it appears the plan is not migration of business, but moving downmarket to capture revenue from smaller clients who wouldn’t otherwise have WPP on their radars”.
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It’s this last point that may see some in the agency world scratching their heads at the news. Does an embrace of self-service strategy, content creation and optimization threaten cannibalizing the markets on which WPP relies for most of its many billions of revenue? Ivan Fernandes, a WPP veteran turned marketing sector advisor, says that while the move is a “step in the right direction,” providing a “positive narrative to the market,” it may appear a “confusing play” for agency leaders within the WPP network.
“The question, basically, is at what stage they offer managed services versus self-service, and what’s going to be the impact on those agencies,” Fernandes says. “It’s not as easy as ‘here’s a tool, go and use it’ – you really need to think this through. It really requires a different set-up of agencies. How are the other agencies going to play in this world? Are they going to be the supporting team to embed self-services into managed services? Or are they going to be competing with self-service?”
“If I was the CEO of one of those agencies, I’d have a lot of questions,” Fernandes says.
Forrester’s Pattisall is more sanguine on the question of cannibalization. “I see this more as a defensive move,” he says. “Providing a self-service option to existing enterprise clients isn’t cannibalization. It’s customer retention by stemming the migration to walled gardens like Meta, software companies like Adobe or service providers like Pencil Pro. And it may well prove to be a better self-serve solution if the client is already a WPP Open enterprise customer that has vast access to data and domain-specific model training.”
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Much depends on pricing and the quality of the offering to see how much of a (in WPP’s words) “significant shift” will follow from WPP’s down-market play.
Gartner’s Wilson says that while it brings up serious challenges about the fundamentals of business structure and what agencies offer, it’s not time to panic. “It will be a big challenge to position the behemoth as a viable, small-client-friendly solution to clients who are working with boutique agencies or freelance marketers who bring a personal touch,” he says.
For much of the midmarket, Wilson says, “investing in more tech, which is also difficult to make the business case for, isn’t going to outweigh the counsel and managed services of a good external agency”. But the announcement should still, for smaller and independent shops, be “a clarion call to step up their strategic counsel of clients, and to be more proactive in offering cost efficiencies through AI.”
Are indies ready for that challenge? Agency intelligence shop Agency by Agency (AbA) finds that there may be a readiness gap between agencies’ reported and actual use of AI models. While Forrester estimates that 75% of agencies now have in-house generative AI models, AbA finds that only 23% mention that capability on their website. That number’s even lower in categories such as production and design – those most directly in the sights of Open Pro.
Tom Salmon, co-founder of AbA, says that indicates a “complex set of anxieties” that make the practice much harder than the theory of agencies shifting models or embracing AI. “There’s a real tension for agency leaders here: how can you maintain profit margins on time-and-materials billing models when AI drastically reduces the hours required for tasks? The hesitancy to discuss AI publicly while embedding it operationally hints at an industry grappling with fundamental questions about value, pricing and positioning.”
Some in the independent space are more bullish. Amar Chohan of the DCA, which represents indies, sees not a land grab but an opening in the move.
“WPP is admitting their traditional model can’t efficiently serve the mid-market,” Chohan says. “Can WPP compete on price with existing service and tech stacks? They’re admitting they can’t compete on service with independents because they’ve already gutted their own service levels… The real risk is that this further commoditizes marketing as just ‘efficient production’, rather than strategic creativity. But that race to the bottom doesn’t threaten agencies who’ve built their reputations on thinking, not just making stuff.
“WPP’s entire business is built for high-touch enterprise sales – long cycles, relationship managers, bespoke pitches. Selling self-service software to SMEs requires the opposite: product-led growth, frictionless sign-up, digital acquisition at scale. These are different businesses with different DNA. Do they have the capability to operate like a SaaS company? Nothing in their history suggests they do.”
“Running both simultaneously creates real conflicts,” Chohan continues. “Where do you invest – enterprise sales or product development? How do you price the platform without cannibalizing your service business? How do you tell premium clients you’re ‘world-class strategic partners’ while telling everyone else ‘here’s a DIY tool’?
“I can see an outcome where it becomes another initiative that sounds good in earnings calls but doesn’t materially move the business. Meanwhile, independents keep winning by being excellent at one thing: strategic and creative partnership.”