Okay, so that film shows just some of the incredible work that we do for our clients. Work that combines strategy, creativity, media insights to drive results for our clients. It's why they come to WPP: to build brands, to drive sales, to sell product, to shape culture. It's also why our people work for WPP companies, because they want to do great work for the world's biggest companies. So welcome to our 2024 Capital Markets Day. We're calling this next phase of our strategy Innovating to Lead, and what we'll show you today is how we're going to achieve that ambition. First, we'll show you how our investments in AI are paying off, allowing us not just to paint a vision of the future, but to use it in our work to deliver benefit to clients today. Yeah. Arthur C.
Clarke said, "The best technology is indistinguishable from magic," and I think that's what you'll see today. Secondly, we'll show you why creativity matters. Sometimes underestimated, creativity makes our work effective and multiplies our clients' investments in marketing to drive financial growth. In a more complex, AI-driven world, we believe it's even more critical for our clients. But to deliver it, we and our clients need to transform, and that's what we are doing. And thirdly, we'll show you how our new powerhouse agency, VML, and the world's leading media agency, GroupM, are transforming themselves to grow faster and create more scale. Along with the creation of Burson, this means that six brands now represent 90% of WPP's business. A simpler, more effective strategy. And finally, we'll set out the financial commitments that result from this plan.
Now, this is my third Capital Markets Day as CEO of this company, and I can honestly say that WPP has never been better positioned, thanks to the decisions and investments that we have made. I hope you'll see the confidence that I and our whole leadership team have in WPP and in our future. Now, I know we faced slower growth in 2023 after two of the fastest growth years in our history coming out of COVID. Our technology clients reduced their investment after very strong growth, and while I've been doing well on winning new business in general, we faced a tougher set of reviews, particularly in our media business in the U.S.
But I hope you'll see how the actions we've taken, the investments we've made, together with the commitment of a very talented set of leaders, will deliver this plan for faster growth, improved margin, and stronger returns to our shareholders. So, let's get down to it. So this is the statement that you have to read quickly. But what we're gonna cover today... So we'll start by taking you through our journey today to show you what we've achieved. Then we'll look at the strengths of our business, why we're positioned to grow. We'll talk you through our strategy to lead with detailed presentations from leaders across WPP. They're gonna dig into the detail and explain what we're doing in practice. Joanne, our CFO, and my financial partner, will then take us through the financial plan.
And finally, we're delighted to be joined by Manolo Arroyo, the Chief Marketing Officer at The Coca-Cola Company. In conversation with Laurent, we'll talk about our partnership, our use of AI, the transformation we're achieving together, and why we're ambitious for the future. We'll have some time at the end for Q&A. So here's the detailed agenda, which for those of you in the room is printed on your chairs. And those of you who joined us in person, we hope to come upstairs for drinks at 5:30 P.M., and during that time, Stephan and his team will give you live demos of Open, our AI-powered platform, in operation. So let's start by looking at our strategy and how we've got to where we are today. Now, back in 2018, we called our strategy Radical Evolution.
That's because we wanted both to be radical in our approach, but also to move at the right pace, a pace that a people and a client-centric business could absorb, so we could make the changes we needed to without disrupting our business. And our accelerated growth since then shows our success in balancing these objectives. There have really been two phases of the strategy to date. The first, from 2018- 2020, where we had to stabilize the business. If I can remind you, Ford, our largest client globally, was up for review. We began by launching our positioning as the creative transformation company to set out our ambition. We built our client relationships, turning Ford from a client up for review into the case study that John will share with you later.
We grew our leadership team and established an executive committee at WPP for the first time. But perhaps the biggest move was the integration of analog and digital assets, both VML and Y&R, to form VMLY&R, and Wunderman and J. Walter Thompson to form Wunderman Thompson. And critically, within not much more than a year, we were able to successfully dispose of our 60% stake in Kantar, which gave us the financial buffer to withstand the impact of COVID that hit just two months later. The second phase of our strategy, we started in 2020 during COVID. We grew our client relationships, winning the largest ever client review in our industry in our unique partnership with the Coca-Cola Company. We continued to strengthen our leadership and build a culture that brought us together during COVID. We invested organically in AI and new capabilities in influencer marketing and commerce.
We also took three separate companies, Finsbury, Glover Park, and Hering Schuppener, and with management, created what is now the world leader in strategic communications, FGS Global, in which KKR recently invested. All of these changes and investments take me where we are today, launching the third phase of our strategy that we're calling Innovating to Lead, because WPP has innovation in its lifeblood, and so is our desire to lead our industry. So that's the backdrop to where we are today, and let's look more closely at what we've done. So this is where we started. It's hard to see how we could fit any more logos on this chart, and to say our operating model was complex is something of an understatement. Today, it's a lot simpler.
Our revenues today are consolidated in far fewer brands, with 60% sorry, 90% of our revenue is generated by six global networks, and you'll hear directly from the leaders of five of them today. We've also been able to build a world-class leadership team, and if you look at the team, each element of our strategy is visible. Some like me, Andrew, Andrea, Lindsay, Jane, and Michael at WPP, and Mel and Richard in our agencies, have been with the company for some time. Other very talented leaders came in through acquisitions: Ajaz, Christian, Jon, Stephan . It's just one example of how acquisitions have strengthened the company. And we were able to recruit great talent. Laurent from Publicis, Rob and Devika from McCann, AnnaMaria from DuPont, Joanne from Britvic, and most recently, Corey from Google.
I believe we have a strong, cohesive, and motivated team to lead the company. In my view, which may admittedly be biased, the strongest in our industry. Now, as well as people, technology is critical to us, and our technology and data capability has been strengthened through a mix of organic investment, acquisitions, and partnerships. Organically, our focus has been building platforms powered by data and now AI. Our acquisitions have been more disciplined, with a heavy emphasis on technology. More than 70% of our acquisition spend has been on technology-powered companies. And finally, while we built strong strategic partnerships that make a difference to how we deliver to clients, business advantage, data integration, technology integration that help. Now, AI is going to be a major focus of today's session, as you'd expect, and it's important to say that it's not new to us.
We've been using it in our work going back at least 10 years. Back in 2014, we helped Tesco optimize their delivery routes with AI. Our first creative work was in 2016, when J. Walter Thompson had a groundbreaking campaign for ING that used AI to create Rembrandt paintings, a precursor to what we see in Midjourney today. In 2018, I stood here in this room and said that AI would be a critical part of our strategy. Most importantly, perhaps, we acquired Satalia some two and a half years ago, and you'll meet Daniel, its founder, in a few minutes to see his contribution and their contribution to our strategy. Now, another area I know has had a lot of discussion is our transformation program. I'd like to cover with you what we've done, the impact we've had, and show you where we are.
To start with, I hope you'll see we've been busy. Over the past five years, we've retired around 300 brands. That's more than 1 a week. We've eliminated 1,400 legal entities. That's more than 1 per working day. We switched off 70 ERP systems, closed 840 office locations. That's around three a week. Most importantly, while we've invested around GBP 800 million in acquisitions, we've also raised more than GBP 3.8 billion from more than 90 disposals. Now, I'll let you look at the progress on the right, but you can see how we made progress in each of the key elements of our strategy, and I'd say that we've really broken the back of our transformation program with a solid plan for finalizing it. So what's this meant financially?
Well, actually, if you look at the facts and take, let's say, 2019 as the, as I think, the fairest pivot, you can see our performance has improved. We've achieved accelerated growth to 2.6%, in spite of a fair degree of turbulence in the global economy, and if I could remind you, we are navigating the structural challenges we face, disintermediation by technology companies, in-housing, competition from consultants. You know, our industry, I think, and WPP, is well used to navigating change. We've also grown our margin after a number of years of negative growth. With lower net debt, we're building a platform to reinvest for the future. We're pleased to say we've done this while returning GBP 4 billion to shareholders. So if that's the past, let's turn to the future and why we believe we're very well positioned for growth.
Now, we take great pride in the market-leading position of our six major brands. The number one brand experience and commerce agency in VML, the global creative giant that is Ogilvy. AKQA, an iconic brand celebrating its 30th anniversary this year, but just as fresh in its work today as it was when it was founded. The world's number one global production company in Hogarth, GroupM, number one global media agency, and finally, the newly announced Burson, a top two global PR firm with a fantastic leadership team and path to further growth. We believe these brands are critical. They're important to our people and to our clients. Now, we don't need, 500, as we used to have, but we believe we now have the right number.
They allow us to attract the best talent, they're meaningful to clients, and they allow us to manage competing clients within WPP, giving them the confidence to work with us. Secondly, we have a client list that is, I think, unique. We work with three of the world's four most valuable companies, two of them, Apple and Google, in our top ten clients, and one, Microsoft, just outside it. These relationships are enduring. We celebrated the 80th year of our relationship with Ford last year, and our relationship with Unilever goes back to 1902. The world's biggest, most demanding companies trust WPP as a partner. As you can see on the right, we've strengthened these relationships. After a tough year, time five years ago, they're now stronger than ever... Now, one of the reasons these clients choose WPP is because of our unparalleled global footprint.
More than any of our competitors, we have the ability to serve them around the world. In markets like India, where we have 11,000 people, or Brazil, where we have 6,000, we have the depth and breadth of strategic, creative, and media expertise that global leaders need. And speaking of media, we're also the global leader in media. We manage more than $60 billion in billings globally, we're the number one agency group in more than half the world, or nearly half the world, and second in most of the rest. You'll hear from Christian later on our plans to accelerate our growth and strengthen our position in North America. Media is a critical growth driver for WPP. It's a real strength and in an area where strength and scale matters.
Now, there's a lot of talk about data and its importance in media, and we're firmly of the view that it's critical to embed data in our media offer to deliver value to clients. I'd like to touch briefly on this topic. First, by explaining Choreograph. So Choreograph is a business unit within GroupM, that serves GroupM and the rest of WPP. It builds data products and technology. It offers consulting services to clients. It has around 1,200 people globally, and we'd like it to grow faster. It does own meaningful proprietary data, but Choreograph's primary role is to make sense of the data, and to build the technology that powers GroupM to media operations with data, and connect it to the rest of WPP. This technology and approach is ready and not threatened in a post-cookie world.
Now, turning to our ability to access the data that we and our clients need. First, I said we do own data in WPP, thanks to the acquisition of KBM back in 1999 and iBehavior in 2010. That data includes 300 million individual profiles in the United States, with more than 10,000 unique attributes. But as importantly, we have the ability to join together three other areas of data: contextual data about the market, our clients' own data that they own and want to protect, and data from platforms like Google and Amazon that we can use to drive marketing plans. Strategically, we've chosen to compete on how we can deliver better data-driven marketing programs for our clients, not in the area of who owns the most data. Simple answer to that question is Google or Meta or Amazon.
I don't think it's ever likely to be WPP or indeed any other holding company. Now, today, we also have WPP Open. Think of this as our unified technology platform that brings together all of WPP's service offerings, technology, both proprietary from our partners and data, in one AI-driven platform. We've been working on Open for over two years, rolling it out internally. And over the past year, we've been deploying it into some of our largest global clients. It was a critical element in our successful win of the Nestlé Media business in Europe over the summer. Now, Open helps WPP agencies integrate our offering, but most critically, it also helps our clients to standardise and automate their marketing operations. In an AI-driven world, it allows us to scale our AI solutions in a safe and secure way across large global marketing organisations.
Now, earlier, I touched on the importance of culture at WPP and how we're committed to our purpose to build a better future for our people, planet, clients, and communities. Most importantly, we want to build a diverse workforce and an inclusive culture, one that represents the societies in which we live. It's important to our clients, and it's important to me. And just one example, WPP was placed sixth in the FTSE for gender diversity as part of the Hampton Alexander review. We also need to take responsibility for our impact on the planet, and here, not only are we able to do the right thing, but we're able to build our business. Launching a media carbon calculator in GroupM and sustainable production in Hogarth.
We support many clients in their own sustainability initiatives, from H&M's work at AKQA to launching Notpla, a biodegradable packaging that eliminates the need for plastic. Lastly, across WPP, many, many people give up their free time to use their unique skills to help important causes in their communities and countries. If these are our competitive strengths, what's our strategy to lead our industry, to take advantage of the opportunities ahead to accelerate our growth? Four strategic imperatives really frame how we deliver our strategy. The first centers on AI, the second on creativity and creative transformation, the third is our world-class brands, and the fourth imperative for us is to execute efficiently and with discipline. I'll briefly run through each of them before some of our fantastic leaders come up here, bring them to life, and share what we're doing in more detail.
So let's start with AI. Now, our belief is that AI will be as transformative to our business as the internet was 30 years ago. Our industry, the media industry, may be the most disrupted of any industry recently, first by the internet, then by the mobile revolution. But importantly, through this time, WPP has remained relevant to its clients, and our goal is to remain just as relevant through the AI age. Today, AI and the explosion of generative AI is similarly disruptive, because for the first time, computers can do things we thought only people could do: take pictures, write copy, create images, draft press releases. Gen AI will change not just the way we engage with consumers, it's also going to change the way that we work. And why are we confident in what we're building?
Well, our approach is comprehensive, and I think this framework will help to explain. So at the bottom, we have to embed AI in the way that we work. It's gonna make us more efficient and take out cost. It's what every business must do, but it has to be done. It's gonna help us reduce cost, which we can reinvest and use to improve our margin. Secondly, we have to embed AI in our products and services, as well as create new ones, and we'll show you today some of those products, products that we've deployed operationally for our clients. And lastly, we need to use AI to reinvent our whole business, which is the challenge that Stephan and Daniel have taken on. Now, in this tackling this challenge, we think WPP has a very strong set of competitive assets. The first is the technical expertise in Satalia.
Think of them as our deepM ind. They enable us to build and train sophisticated models. It's a scarce talent. Secondly, and thanks to this, we're able to combine technology expertise with marketing domain knowledge. We're able to train and build proprietary models for WPP and our clients. Thirdly, we have WPP Open, enabling us to deploy our products across different disciplines and into clients. Fourthly, we have a coordinated investment plan across a now simpler WPP. And finally, for us, partnerships are critical. While investment is important, access to partners is in some ways even more important, 'cause they allow us to leverage the billions and billions of dollars in investment that major technology companies are making in this area, and you'll hear later from some of the world leaders in AI.
Now, what's most exciting to me is to be able to show you some of these products for the first time. While we've been working on them with clients, we haven't really shown them in public before, nor indeed, have we seen them elsewhere. These are some of the examples, and you'll have seen some examples of our creative work before, but what you won't have seen is the power of the AI tools and products we've built. That's what you'll see later. Now, these new products will undoubtedly raise questions for you on the financial impact on WPP. I'm sure we'll get into that in the Q&A. So let's take a look at how we're thinking about that. And net net, we believe that AI will support our accelerated growth and improve our efficiency, and here's some examples of how we can do this.
First, it's going to allow us to sell new technology solutions through WPP Open, earning technology license fees that powered by our AI services. Secondly, we can offer AI service and consulting, just as we did with the Sherwin-Williams AI-powered commerce platform, or the many clients who we're currently consulting to on the power of AI and how they enable it in their own organizations. Thirdly, it's gonna allow us to augment our creativity. Not replace human beings, but enhance them to improve the ROI that we deliver to our clients. You will see an example of how we're already doing this for clients on the Amazon and other shopping platforms. It's also gonna help open up new business models, just as with Xaxis and Finecast, allow us to move away from hours-based pricing to new output and return-based pricing models.
Finally, it's gonna enable us to work faster, unlocking efficiencies in our back office. The second element of our strategy hinges on creative transformation, and as I stated at the start, WPP's mission is to be the creative transformation company. Now, by this we mean we want to apply creativity to each area of what we do, not just in advertising, but in our media plans, our social campaigns, our design work, and public relations advice. We're also in the business of transformation, helping the world's largest companies, both global and domestic, to transform how they market in a very different world. And in a world that's changing as fast as ours, the need to transform and integrate our services is even greater. It's not just about AI, it's also about helping clients use influence and figure out TikTok.
It's dealing with the proliferation of channels and new advertising opportunities on Amazon and Netflix. We have to help clients navigate the polarization we see in society. To do this successfully, WPP needs to bring together many different skills and integrate them for our clients. We also have to use judgment and experience, old-fashioned, but important skills. And if you look at our top 10 clients, that's what we're doing today. It's leading to our top 10 clients growing at 6.6% versus 2.6% for the rest of WPP's business. These global companies come to us for the breadth and depth of our offer.
We don't do everything for them, so there are still good growth opportunities ahead, and we're very grateful to have Manolo coming here later to talk to us about the partnership with the Coca-Cola Company and the transformation we've been undertaking together. Now, Rob Reilly, my creative partner and our Chief Creative Officer, will introduce three of our four leaders later, and together they'll show not just the importance of creativity and how it leads to outsized financial returns. I hope they'll have you come to three conclusions. The first is that our creative agencies do a lot more than just the ads. Though in full disclosure, we're still excellent at doing the ads. For the Super Bowl, we're working on 12 creative spots, and GroupM is buying 19 ads in the game.
Secondly, we want to take away that our production capability is both very strong and also a significant growth opportunity for WPP. Clients spend roughly as much on production as they do on creative fees, and today we capture only a small part, maybe 20 or 25% of this amount, another growth opportunity for us. Lastly, there's an untapped opportunity to apply technology to the creative process for the first time, just as we've done in media and production. It allows more discipline, automation, and value creation for clients. Now, the third element of our strategy has been to build more powerful brands. There's really three key developments in how we operate in this area that we've made in the last six months. The first is the creation of VML, and you'll hear from Jon Cook later.
It has a compelling and broad offer, an exciting growth plan, and a depth of resources to serve global clients. The second is the continued process of simplification at GroupM, with the launch of Synergy 3.0, the five-year plan that Christian announced when he became CEO, and he's going to talk to you about how this plan will strengthen our offer and improve our hit rate in the USA. And finally, last week, we announced the launch of Burson, bringing back one of the most iconic brands in the public relations industry. It's a move that's been very well received by people and clients, and we'll run an investor update later, where Corey and Ana Maria will share progress and what that really means.
Now, these three companies will improve our overall performance, and I think you'll see from the presentations how they're going to deliver faster growth, be simpler with more scale and agility, and also increase our profitability. Now, last and by no means least, let me touch briefly on our, on our financial commitments. So this is our medium-term financial framework and the functional commitments that Joanne will take you through later. As I said, I know we've had our challenges on the top line in 2023, but what we can control directly, our margin commitments and our working capital, we've over-delivered on our guidance. We want to accelerate our growth to 3%+ organically. We think of this as our commitment to you, and our ambition is absolutely to exceed it.
At the same time, we're committing to deliver to a headline operating margin in the range of 16%-17%, supported by structural cost savings. And finally, we're aiming to improve our cash generation significantly. We have total alignment on the need to reduce cash restructuring costs. And finally, we'll maintain a strong investment-grade balance sheet. So, that's the strategy. Now, let's turn to the first element of the plan: to lead our industry through the application of AI, data, and technology. In some ways, this is the part I've been looking forward to the most, the chance to show you today how we're using AI to transform marketing. We haven't shared much of what you'll see today in public, so I hope you'll be as impressed as I was when I first saw it. So over to you, Stephan.
Great. So today, WPP is the clear leader in the application of AI to the marketing and advertising industry. That's quite a bold statement, but to back up that bold statement, I'm going to tell you through examples of work we're doing with actual clients today, tools that we've built, and the innovation we're doing with some of the world's largest technology companies, why that is true. Applying AI to marketing is not a trivial task. Making good, plausible content with AI is not that, not that difficult, and many of you have done that in ChatGPT and other tools over the last year. But making plausible, good content is not what marketing is about.
Marketing is about making correct content, content that is true to the brand of our clients. Content that is correct for the channels where we want to distribute them. Content that distributes or represents the products that we're selling accurately and in high fidelity. And ultimately, content that resonates with consumers and turns consumers into customers. This is an altogether harder task and something that we've been investing a lot of time and energy over the last year. The five pillars of our strategy are really the following. Firstly, WPP Open. So WPP Open is our end-to-end AI-driven marketing operating system that brings together all WPP's proprietary tools, technologies, data, and services in one operating system. This is key to scaling AI, and I'll show you more detail about that in a minute.
Secondly, as we started building solutions and doing our own projects with AI back in 2018, 2019, we realized that leadership in AI required highly specialized, very arcane skills. Leadership in AI, particularly today, does not come from tens of thousands of people in offshore engineering centers. AI leadership is being driven by a handful of incredibly specialized individuals, largely coming out of academia and out of research labs. We've been doing work with Satalia as a partner on a couple of clients for a number of years. So we were delighted when Daniel and his team agreed to join WPP in 2021. Again, Daniel will show you in a minute how we are applying that R&D to the marketing process.
The third pillar of success in AI is to organize your data and to have a variety and breadth of data that you can push through the AI models and into your applications for clients. In 2021, we formed Choreograph, now led by Evan Hanlon. And again, in the second part of today, you will hear from Evan why we have not only the right strategy to lead in an AI-driven world in terms of data, but also why we believe that our products and our strategy is correct for a post-cookie world and a world where consumer data is increasingly limited in terms of its use within marketing. One has to look beyond consumer records to a wider variety of data in order to drive relevance. The fourth element is our investment in training and workforce transformation.
Back in 2018 already, we kicked off a number of programs to ensure that our workforce has the right skill set and are upskilled in new techniques, new technologies at a scaled level. We sent a large cohort of executives to the Oxford Saïd Business School for a post-grad diploma in AI. Turned out to be a lot more work than they expected. We created a Future Readiness Academy, large-scale training program for all our people to train them on AI. More than 50,000 people have gone through that to date. Increasingly, we are bringing in new, fresh talent through our creative technology apprenticeship program, bringing in young, diverse talent from across the world into this incredible merger of technology and creativity into a new skill set.
In many ways, that experience is teaching us the new pathways for training young people in the future of our technology, industry. Lastly, partnerships. It's clear all of you follow these companies. The amount of money that these large technology companies today are investing in infrastructure, product development, and research to drive the AI revolution forward is absolutely immense. At WPP, again, five years ago, we formed a very strong central partner organization that partners with all these large companies, as well as many smaller ones like Salesforce, Sitecore, Shopify, Sprinklr, and the like, to not only build new product with them, to train our people on how to use their technology, but also to go to market jointly with them to deliver for our largest clients.
Let's hear from our partners, what it's like to partner with WPP and what it means to their organizations.
This is an extraordinary time for all of us. The advancement of AI has reached an inflection point. It's a tool that is a hyper-acceleration technology for creativity.
We are entering this exciting new phase of AI, where we're not just talking about it, but we're getting into the details of product making, deployment.
WPP and Google are long-standing partners. We're proud to partner with WPP to drive impact with Google's generative AI technologies and solutions.
In order to be successful in generative AI, you need several components. One, you need AI technology, but you also need a large AI infrastructure, and the more customers you have, the more use cases you have, the more data that you have, the richer that pipeline will be. WPP has such an incredibly large platform.
With Google Cloud's groundbreaking investments in data analytics, artificial intelligence, generative AI technology, and cybersecurity, and WPP's world-class talent in marketing, creating, and advertising, we can bring and are bringing unparalleled creative solutions to some of the largest brands in the world.
We are bringing the very latest of GPT-4, including GPT-4 Turbo, GPT-4 Turbo with Vision, to Azure OpenAI service, allowing you to prompt with video images and text. In fact, our customer, WPP, is already using this today with one of their largest clients.
I love the work we do for the automotive industry. For the very first time, we're able to fuse full fidelity 3D that we bring in Omniverse and the infinite exploration of possibilities of generative AI. In a way, it's AI augmenting humans, and that was really the vision of the partnership between our two companies.
It's great to see the power, and I think this is going to be even more powerful in the years to come.
We're proud to continue to work with WPP to build new AI solutions.
No company has the creative reach of WPP in the world. Our partnership is really exciting to us, and our journey together is gonna lead to some pretty exciting places.
That's great. And you can imagine, as a technologist, how exciting that must be for me to work with companies like this and leaders like Satya, Jensen, and TK on developing new solutions for our clients. The automotive example that Jensen referred to is a combination of the NVIDIA Omniverse platform, it's a 3D rendering solution, with generative AI that is completely revolutionizing the automotive content supply chain. The example that Satya showed at Ignite last year, that was in the video, that was a solution we built in our Satalia team within about two weeks of getting access to their GPT-4V, their GPT-4 with Vision model. And Satya was so impressed with the result that he put it on his, his keynote presentation.
So you can see how important the symbiosis between our application of this technology and marketing and industry and content is with the research work that our partners are doing. Switching gears quickly, one of the most important challenges that all of our clients are now facing in terms of adopting AI in their organizations is how do you empower a workforce? How do you power an organization to adopt AI in a structured, methodical way, connecting the right data to the right systems, to the right processes, in order to change how you work? WPP's answer to that problem is WPP Open, our AI-driven, end-to-end marketing operating system.
And so allow me just to step you through the layers of that platform quickly so you understand how fundamental this is, not just from a technology perspective, but also from an operating model perspective, in the marketing and advertising industry. At the heart of the platform are a whole series of platform features, functionality for identity and role management, security, so people know what they're allowed to do, and we can control who's got access to what. A workflow and orchestration tool that allows us to not only combine how we work for clients but also how they work, a design system to create new applications, a marketplace of both proprietary and third-party applications, and an API framework to allow us to build new tools and connect to our third-party services.
So everything you would imagine in a kind of a standard modern, platform as a service... The second critical layer is the data layer. And here we have to emphasize, and you'll see this again, when Evan presents in a minute, is the variety of data, from proprietary WPP data assets, data that we license from third parties on everything from weather to events, to locations, to clients' data. At WPP, we believe that our clients own their consumer data, our clients own their content, and our clients own their campaign data. But we have to be able to connect to this in sophisticated ways to connect with our data to deliver new solutions. And again, Evan will touch on that. And then ultimately, public data, because there's a lot of that, and often it's very useful.
The data is then connected into our AI layer. Daniel will explain in more detail exactly what these brains are, but effectively, it's the marketing algorithm. We sat down together and understood that marketing is effectively a four-part algorithm. You're connecting consumers to brands through content and channels. And so by encoding those four concepts into custom AI agents, or brains, as we call them, we are now able to bring the power of AI to the entire marketing supply chain in a very structured way. The next layer is our client workspace layer, and I think from a philosophy perspective, from a position relative to our clients' perspective, this is arguably the most important layer of the entire platform. The client workspaces are branded with a client's, the client's brands and their, their colors and their attributes.
But critically, the client workspaces encompasses each of these clients' marketing methodologies and processes, so that the way that we work with them is the way that they work internally. In other words, Open does not only organize WPP internally with our... with each other, we also use it to help our clients to organize and standardize the way they work within their marketing teams across multiple markets and brand organizations. This is a key challenge for many of our largest clients. And then ultimately, we connect all the, all this infrastructure to a rationalized set of applications that we now call studios, to cover everything from creativity, ideation, to production of content, to media management, commerce optimization, experience management, and PR, as well as our third-party applications. This is a significant body of work, and through the day you will see many examples of that.
But please be reminded, if you stay for drinks, there will be live demo sessions, in the drinks area, so you can see these tools live. If you apply this framework to a single client, I'm going to illustrate it through one of our early adopters of Open, Nestlé, just to show you how the data flows through the entire ecosystem. So that on one platform-as-a-service infrastructure, we're now able to configure for a single client, like Nestlé, all the data assets we need through the brains architecture into their workspace, and then the tools that we use to do their work, creating an end-to-end operating system driven by AI. All right, so enough theory. Let me show you some demos. The first thing I want to show you is, a product we call our Creative Studio, Open Creative Studio.
This is a product that we started developing early last year, really in response to the enormous explosion of generative AI as a category in the marketplace. You know, we've been working with AI for many years, but what happened in November 2022 is that suddenly, generative AI became a popular culture moment, right? It became a dinner table topic. Your kids started talking to you about it, your grandparents started talking to you about it. It's kind of amazing. And so, you know, we decided that we wanted to democratize access to generative AI in WPP. Our people were using it organically, and we wanted to give more structure and control over how they use it and adopt it within the business.
So we created the Creative Studio, which is effectively an interface of, workflows and tools, and prompt engineering, that sits on top of all the base foundation models in the marketplace. And the beauty of this platform now is that we can put in new foundation models as they come to market. We're about to add Gemini. And as this industry continues to evolve, you're able to increase the capability or the underlying engine, as it were, while keeping the interface and the front end similar, or at least as you evolve it, independently. This has been an absolute runaway success in WPP. With hardly any internal promotion, organically, since we went into general availability in September, we now have 28,000 users on this platform.
We've generated more than 1.5 million LLM prompts and more than 1.6 million image prompts. This has been... We've not had to bemoan the people to do it; we've not had to go on roadshows, completely organically, driven throughout the organization. I think it speaks to the curiosity and the innate sort of sense of curiosity and creativity that our people have to explore new tools, and to see generative AI really as complementary to people, not as a replacement for their jobs. Let me give you just a little bit of a sneak peek on what it looks like. Again, come and see the live demos later. There's a lot here, so I can only show a few of the features.
But let me show you a number of them. So as we go from the WPP Open homepage, we're going to enter the Creative Studio, and as we go into our landing page here, we can now create a project based on my permissions. And as you can see here, we now have access to a number of foundation models, but also more structured tools. So in the chat feature, you can see the models we have available on the dropdown there. But let's go and create some image content. So we're going to use DALL-E 3, the OpenAI model, it's the latest model from them, and put in a very simple prompt, "perfume bottle pack shot," which is not a good prompt, so let's enhance it.
Here we're using prompt engineering to create a far more elaborate prompt that teaches people not only how to prompt, but also gets better results by itself. You can then add artistic styles, design styles. We're gonna choose 3D rendering here, and you press Imagine, and you get your results, and you can upscale the one that you like. So fine, that's great. Let's create some more content. Let's create some headlines. So we go into the headline generator, and we're going to select a number of elements. Coca-Cola is the brand. We're going to say the tone of voice is, let's say, inspirational. We're going to target music lovers because of the Coke Studio product, and we're going to say the objective is conversion. Again, you can see the prompt engineering built into the tool to generate the content.
You get your five headlines. They all look plausible, they all look fine, usable, they're linguistically correct, but how do you know if they're good? Now, the easiest way to train LLMs to make good content is to feed it with other good content. So what we're gonna do here is, we're going to upload a very elaborate Coca-Cola shopper and experience retail design document. It's 26 megs, 81 pages. You upload the document, and this was not edited or fast-tracked, by the way, the system uploads the PDF, reads it, and is now able to answer very specific questions based on that document. And so here we're going to say, "Create five more headlines." Give it a second to read the document.
We're going to say, "Create five more headlines, but tell me why it's good, and tell me why it complies with the shop and retail design principles." And so you can see here now it takes slightly longer because there's a lot more data to manage. The context window is much bigger, but you can see that not only are the headlines much better, but in each case it tells you why it is good. Teaching people best practice through the interface, right? So this is really becoming super powerful, as you can see, and just the ability to consume that amount of data is quite impressive. Last thing I want to show you is a sort of a chained generative AI process. This is something for to create mood boards. This is just for ideation, not for actual production work.
We're gonna create a mood board for a Ford F-150 Christmas campaign for Instagram in the U.S. And the axes of the mood board are, either audiences or occasions, weather, time of day. We're gonna choose audiences and occasions. And when you then press on Imagine, the system itself is generating not only the audiences and occasion definitions, but also headlines, calls to action, and the actual images for the mood board. Right? Now, this is not production-grade work that we would put in market. This is for ideation. This is to get into a room with a bunch of creative people and say, "I have an idea. Let me show you what it looks like. Let's explore something.
Let's go from inspiration to representation much faster." And so you can immediately see how these things are, why they're exciting to creative people, and why they've been adopted so, so vigorously. So, as I said in the beginning, this is all fine and well, very impressive, but the real battleground for AI in marketing and advertising is to make brand-specific, accurate content, to have a machine trained on a brand's tone of voice, brand elements, and to be able to speak and create like the brand would. And so to tell you how we are doing that, I'm going to hand over to my friend and colleague, Dr. Daniel Hulme, from Satalia, who's going to show you how the research Satalia has been doing feeds into that problem statement.
I'm very excited today to talk to you about a subject that I've been passionate about for the majority of my life, AI, and how these emerging technologies are reinventing and disrupting the marketing, media, media, and communication industry. So I've been involved in AI for over 25 years. My undergraduate PhD, postdocs, are all in AI from UCL. I ran a master's program for four years, where I had 100 students going out there, applying these technologies to solving problems across a whole range of different industries, and I'm currently entrepreneur in residence for UCL, helping them commercialize deep technology. UCL is one of the world's leading AI institutes, spinning out companies like DeepMind and Satalia. I started Satalia in 2008, and over the past 14, 15 years, I've been building AI solutions for some of the biggest companies in the world.
In 2014, we helped build Tesco's last mile delivery solution and continue to work with Tesco, solving problems across their supply chain. In 2017, we worked with PwC to build a workforce solution that allocates thousands of staff at scale never been solved before. In 2021, we joined WPP, where I continued to lead Satalia, but I'm also very honored to take on the Chief AI Officer role. So we joined WPP for three reasons. The first is to amplify and accelerate bringing AI to the thousands of brands that we represent around the world. And actually, for many years before the acquisition, we'd been working with Stephan and Neil Stewart to bring AI to organizations like DFS.
Like, I like to think we've been doing AI before it was cool, and we can now do that at the scale of WPP. The second reason is to really enhance the creative capacity of over 100,000 people across the organization. I'm really passionate about this subject, and of course, we're using the productivity tools to increase productivity, like Copilot and Duet and Firefly, which have had a really positive impact on the business. But we've also been looking at how can we utilize AI to completely optimize end-to-end marketing, which is really what I want to focus on today. And the third reason was to really work with an incredible leadership team and have the once in a lifetime opportunity to completely reinvent an industry.
We were very early on lucky that Mark gave us the task to figure out how can AI be used to change and transform our operating business and commercial model. So, new advances in algorithms over the past decade, plus data, plus compute, allow us to do some incredible things. And Satalia's expertise is really understanding how to apply the right technologies to solving the right problems. And we've been building methodologies and tooling and frameworks that enable us to do this at scale. And if you look across our value chain, like Stephan said, we take brands to customers through channels with the right content. What emerged whilst working with Stephan's team and the domain experts across WPP was a very elegant way of applying AI to marketing.
We believe there are four underpinning AI services that when combined together, can solve the majority of problems across that supply chain. We call these brains. So the first brain is called the Brand Brain. Now, large language models are really good at knowing things about the world. They're very good at telling you what they know about the world through imagery and text, and soon video, and soon sound. But large language models give everybody the ability to create generic content. But the battleground for organizations is not creating generic content. The battleground is creating brand-specific, production-grade, differentiated content. This is very difficult, and this last mile is actually a very hard.
So we take lots of different data sources from brand guidelines to tone of voice to brand assets, and we couple that with the deep expertise we have in branding to now create almost production-grade, brand-specific content. Now, I just want to kind of geek out for one moment. There are broadly two ways of making brains smart. A large language model is a bit like a graduate brain, and one way to make that graduate brain smart is called, unfortunately, ragging. So what you can do is you can give that graduate brain a book or some materials. You can ask it questions, and it answers the questions elegantly from the book. And this is easy.
It can be done in seconds or minutes, and it allows you to create very nice proof of concepts and demos. But to create a brain that truly is a professor of your brand, you need to have deep expertise in training and tuning neural networks. And so we use bleeding-edge techniques from academia. We develop our own techniques, as well as accessing early technologies from our partners to build brains that produce brand-specific content. So I want to show you some of the incredible work we've been doing with Mondelez, in collaboration with the branding geniuses in Ogilvy. Let me introduce you to the Milka brand brain.
An AI brain combines the capabilities of large language models, LLMs, plus tools, and uses deep learning techniques and large data sets to understand, summarize, generate, and predict new content. We built the first iteration of a brand brain for Milka by feeding it with data from the brand foundations, the brand visual guidelines, the tender guidelines product bible, and the Milka Christmas toolkit. Digesting this information has given the brain an ability to speak on behalf of the brand. So we asked the brain a few questions: What is Milka's brand purpose? What are the distinctive assets for Milka? What is Milka's tenderness? Can we give Laila an active role in our stories? In comparison to the generic answers provided by ChatGPT, our brand brain demonstrated its knowledge by being very specific with its responses and helping the user with accurate and actionable information.
We also tested the brain by asking it tricky questions like: Is the message, "Crunchy tastes tender," right for Milka? The brain did not just validate that the message is not right for Milka, but also went on to provide a recommendation. The Milka brand brain is also being trained to create images. To do this, we upload existing brand images and ask the brain to analyze them. The brain learns the details of each asset by describing it with language, which can then be converted into a text prompt. Over time, it stores a wealth of these text prompts that can then be used as inspiration to generate new brand visuals in the future. After the initial training period, the Milka brand brain already has the ability to generate on-brand images that are relevant to the target audience.
Unlike other generative AI applications that only create generic content, our brain has the capability to generate human-centric images, compile headlines and images together, and create social posts that are targeted and personalized, all with full ability for the user to interact with the output and to make changes until the desired result is achieved. The training of the brain is a continuous learning process. As its knowledge base increases, the brain gets more and more capable.
So brand brains are incredible at creating almost production-grade content. As I said, that last mile is extremely difficult, which is where our partnership with NVIDIA and the work that Hogarth do is so important. But large language models are not just good at creating content. They're really good at recreating how people perceive content. I want to say that again. It's such an important concept. For the first time ever, we can build brains that are able to recreate or simulate how people perceive content, and we can use those signals that we've never been able to access before to be able to create better content and also much more accurately predict activation.
I guess historically, if I showed you an ad or a policy or a promotional material, I never really knew what goes on in your mind unless you ask people, and people are not necessarily very good at reporting on what goes on in their minds and bodies. But for the first time ever, we can recreate those signals. And I just want to be clear about one thing. Brand ID data, so emails, names, and addresses, are not helpful in understanding audience behavior. How you perceive a piece of content will depend on the time of the day, whether how well your sports team performed on the weekend, whether there's an election happening.
And it's that, it's that breadth and variance of data that we have across WPP, again, coupled with our deep domain expertise of understanding human behavior, that allows us to create Audience Brains that are truly representative. Actually, this is the data that we used to create one of the Audience Brains for one of the biggest brands in the world, and now their marketing team can not only validate the audiences that they know exist, they were able to surface new audiences that didn't exist and engage with those audiences to try to understand how to best activate them.
And what blew my brain about the Milka project is that we actually built an audience for Milka, and we asked that brain, "What ad would you want to see to get you to buy Milka?" The audience brain created the prompt that we gave to the brand brain. So I hope that you see that in isolation, these brains are not just incredibly powerful, but when combined, they are truly transformational. Machine learning is what people called AI before generative AI, and this family of algorithms is really good at making predictions about the world. Our performance brain uses the signals from the audience brains, coupled again with the performance data that we have, to much more accurately predict activations or clicks like sales. But the power of machine learning is not in making predictions.
The power in machine learning is explaining those predictions. So again, if I showed you an ad that had a black cat, I can predict the clicks and likes and sales, but what machine learning can do is tell me, if you change that from a black cat to a ginger cat, you're going to get more activation because that audience likes Garfield. Now, that's a terrible example, but it gives you an insight that just making predictions actually is not so powerful, but explaining those predictions allows us to make much, much better decisions.
One of the things that we're doing with Google, our Performance Brain looks at the various different assets associated with a video, so, like, the Like button, and Subscribe, and the subtitles, and it explains what you need to do to change those assets to increase brand lift. So finally, now that we can more accurately predict activation, what we need to do is push that content across channels to maximize the return on investment, and this is a large-scale decision-making problem. Satalia, for many years, have been building these large-scale systems for organizations. Decision-making is a completely different field in computer science. If you're old enough, it used to be called operational research. It's discrete mathematics, it's constraint programming, it's non-linear optimization. So let me just geek out for one last time. Imagine if I...
If you have five pieces of content that you need to push across five channels, there are 5x 4x 3x 2x 1 possible ways to allocate five pieces of content across five channels. There are 120 possible solutions. If I have 15 pieces of content across 15 channels, there are a trillion possible solutions. If I have 60 pieces of content across 60 channels, there are more possible solutions than there are atoms in the universe. We have to push thousands of pieces of content across thousands of channels every second of every day, and so utilizing the bleeding-edge technologies from academia to be able to make these decisions is really what differentiates our business, particularly when it comes to media planning and buying.
So these brains, when combined, really do solve what we believe to be end-to-end in marketing. They get the more content to more customers much more rapidly. But of course, all of this is underpinned by the rigorous, ethical and responsible frameworks that we've been using across WPP for many years, as well as the AI technologies that allow us to create safe and ethical content. So the reason why I love this architecture is because it gives our clients a scientific and objective way of measuring our solutions, our output against generic models and those of our competitors. This is not theory. It's in production across WPP and already in the hands of our clients. Handing back to Stephan now to tell you even more.
Brilliant. So to show you one more practical example of what Daniel was talking about, I'm going to show you an example from the e-commerce optimization space, a product that we built called Open Commerce Studio. So, if you understand commerce and e-retail, you'll know that product detail pages, we call them PDPs for short, because everything needs an acronym, product detail pages are the lifeblood of e-retailing. It's the page where you go, where you find the product on the platform, you're reading about the product, you're looking at the imaging, you're looking at the sales points, and you decide whether to buy the product or not. Now, it is, again, like Daniel was saying, a mathematical problem.
When you have thousands of SKUs across tens of maybe a hundred markets, across all the e-retailers in every single one of those markets, you have a massive factorial problem. Not only because you have to create many, many hundreds of thousands of PDPs, but how do you know how to customize them and edit them for that particular market, for that particular marketplace, and for that product? And then how do you keep up to date with changing consumer perceptions? The style might change, the objectives might change. There might be a competitor with a new product in market. How do you update all that content to generate an optimal outcome? We solve this through Open Commerce Studio, combining three different brains in one solution. Firstly, a Brand Brain to ingest the product detail, product description, images, the proof points, as well as their tone of voice.
How do they speak about the product? What's the tone of voice when they market to consumers? The second one is that we look at the, the reviews largely posted on e-retailer websites to understand the shopper barriers. Shopper barriers are those objections that consumers have to buying a product. "Oh, I don't like that much. Oh, I don't like the shape. This is going to clump. This is going to, you know, make my eyelashes look thin," I mean, whatever the, the objective is. But shopper barriers and understanding shopper barriers at scale and continuously is an enormously important part of the solution. That's the audience brain part of it.
And then lastly, the Channel Brain, because each of the e-retailers that we work with have slightly different layouts, slightly different ways that they present content, and the way that you customize it for each e-retailer makes a difference. You... Some you have to be more textual, some, the headlines matter more, some, the images matter more. So combining all three of these solutions into a single product, we can now guarantee our clients a 25% conversion increase within three months of using the solution, as a contractual guarantee. And in reality, we're getting between 40% and 50% conversion increase using this solution. So we've been piloting this over the last year with L'Oréal, and the demo I'm about to show you is the L'Oréal Commerce Studio solution.
So it's gonna be a very short demo, not as long as the previous one. We've already created the tone of voice and of the brand. I'm just gonna show you how to create a new project and how the content is generated. I'll create a new project, and this is gonna be for Volume Million Lashes mascara, L'Oréal. We upload the product detail from their PIM system, so this updates the product information into the system. And now we're ready to create content. So firstly, we choose the market. We're gonna choose the U.K. and Germany. And critically, again, the content we produce is not gonna be translated, it's gonna be customized and built for that particular market.
We are using the L'Oréal Volume Million Lashes mascara, tone of voice, and we extract the shopper barriers from the mascara category, so we understand what elements are gonna drive conversion. We then select the e-retailers where we want to deliver, so Boots, Lookfantastic, and Douglas, and we generate the content. So now, immediately, you can see the content being generated here. Along the left, you've got all the content fragments. Here's the example for Boots. But we always keep a human in the loop. So if you don't like the content, you're a retail expert, you know, you think that should be a shorter fragment, you can either edit it yourself, or indeed you can use generative AI, which is going to say, "Take that selection and shorten it," apply the changes, and the content has been updated.
So you can see how generative AI is not only being used to optimize the end-to-end system, but also the operations in between. It's making people's work more effective. So that's the example for Boots we're now going to use. If you now look at the solution for Douglas, you can see that the text is entirely different. This is not a translation. This is customized to the German market, to the German shopper barriers for this product, right? So hopefully this gives you a sort of a sense of the power of this technology to really supercharge what we already know about marketing, what we've known for years, what we've been doing manually in analytics and research work for years, but can now really scale using technology.
We've been doing this for some of the world's largest and most sophisticated marketers, for a number of years now. For The Coca-Cola Company, the operating model that you will hear Laurent and Manolo speak about later, in and of itself, is revolutionary. But we cannot run the global operating model for The Coca-Cola Company without Open as its operational foundation. We're also, for The Coca-Cola Company, delivering AI content engines that will scale Coke and meals content, production-grade Coke and meals content, to all their bottlers around the world, and we're busy rolling that solution out as we speak. For Google, we are completely revolutionizing the end-to-end media planning and buying process, helping them to predict what content will perform in which channels before the first impression is even served.
For Mondelez, you saw the wonderful work around the Milka Brand Brain, which is really at heart a solution to scale their proprietary empathy at scale personalization technology. This is at the heart of their marketing strategy, and this solution will enable them to scale that. For Ford, we've applied the NVIDIA Omniverse 3D rendering plus generative AI solution, and you'll see some examples of that later in Jon, and Mel, and Richard's presentations, about how we're using generative AI and 3D modeling to create high-fidelity car configurators and marketing content for products before they're even produced. None of these cars roll off the production lines before we have our content in market.
Nestlé, you saw the example of deploying Open, which is really at its heart, for them, an enormous exercise in standardizing and optimizing their marketing methodology across all their markets and their brands. L'Oréal... Nestlé has more than 2,000 brands and operates in more than 150 markets. For L'Oréal, like with Coca-Cola, we are innovating the cutting edge of generative AI, content generation, through a generative AI lab that we set up with them in Paris, and are now scaling that across a larger set of solutions and Open.
So you can see all of these, so all of these, examples are real scaled projects that all of our clients are investing a lot of money and time with us in to, to drive forward, to adopt in their businesses, and to really change the way that they market in a very fundamental way. So in summary, these are the five elements that I've taken you through: our platform, our investment in AI, our investment in data, training, and partnerships. But there's a sixth element that is absolutely critical.
We announced this morning that we will continue to invest around GBP 250 million per year in our proprietary technology, data, and AI capabilities, and we believe this is the right investment level to ensure that we stay not only at the cutting edge, but in the lead of applying AI to the marketing industry. Thank you very much. I think we have a 10-minute break now, so if we can try to be back here at 20 past, that'll be great. Thank you.
Nearly six years ago, we hired WPP to lead some of our largest categories. When we hired them, we thought we were getting a great creative agency partner, but what we discovered is that they are so much more.
At L'Oréal, we are in a period of controlled experimentation with the Generative AI Beauty Content Lab. We are working very closely with our brands, with our creative agency partners, and with the WPP NVIDIA engine to create.
They have a team that really shares our values. They hire people that want to work for that. The second thing is they are obsessed about raising the bar about creativity, and creativity drives change, and that's what we're looking for.
The auto industry continues to change at a pace that we have not seen before. We rely heavily on WPP for new ways to buy media, new ways to get to our target audiences. With all these new technologies, new offerings that customers aren't used to.
At Nestlé, would we say that creativity means business, and the power of the creative teams and the creative structures at WPP is absolutely paramount to us. We've been working with the best creative talent around the world, thanks to WPP.
The consumer journey is far from linear now, and WPP is helping us across all of those areas, from content to creative, to experiences, immediate choices, partnering with platforms, all the way through to commerce with data at the heart.
It's very easy for us to have access to the right expertise and to make it extremely seamless for us.
Creativity is critical to drive a return of investment because it makes your brand stand out and at the same time, makes your brand be memorable. For us, it's the sign we are moving the needle.
Every single day, we see that push, that commitment to detail and excellence. Together through our partnership, we've accelerated our creative excellence by 20 percentage points, and we believe that through generative AI, we will transform how every single asset in the company is produced.
We are learning a lot. We are also asking ourselves questions on IP rights and confidentiality. We are going to use it for idea generation, for inspiration, to augment creativity. All in all, we are very excited about this new creative era.
I think that our greatest transformation is yet to come. We're just scratching the surface of what is possible, and I know there is so much more we can do together.
Okay. Ready to talk creativity. No, not the right slide. I am Rob Reilly. I am the Chief Creative Officer of WPP, and this phrase, "The best job in the world." Now, while Mark is the CEO of the largest media and marketing company, it's an impossible job, by the way, a job I definitely do not want. I have the luxury of being the Chief Creative Officer, which means I get to obsess over the creative work of every one of our companies, and what an incredible job that is to do. Now, I left McCann three years ago for one very compelling reason. That reason being Mark's creative transformation mission. Now, we use the power of creativity to build better futures for our people, the planet, clients, and communities. But why does creativity matter? So let's talk about creativity a bit, right?
So to me, creativity is not a Hollywood word or a music word or an art world, art world word. It's frankly how the world solves really difficult problems and challenges, right? To me, it's the world's most valuable asset... but more importantly, creativity is good for business, right? So there's a small startup company called McKinsey, and they did a study a couple years ago, which is companies with the highest quality creativity outperform their peers in organic revenue growth and shareholder returns. I know my audience. I know what I'm doing, right? So I brought that for you. But pretty amazing that this is a study, and they're actually doing the study again this year, which is great. So there's no surprise why we believe creativity should connect everything we do, and it goes way beyond traditional advertising. Now, we do a ton of it.
As Mark said, we're doing 12 Super Bowl commercials, and GroupM is putting out 19 Super Bowl commercials. That's a lot of commercials, and there's some crazy ones. I promise you, I've been in an edit room myself, and I want to kill myself because it's so difficult to make them. But I think we've got some great things, so look out for those if you're over there. But certainly, we do things way beyond the traditional advertising. I'm gonna give you one example: Corona Extra. Now, what I'm about to show you is not advertising. This is a business-changing idea from AB InBev, that our agency, David, part of Ogilvy, was a big partner in bringing this to life, and it pretty much turned around their business in China in a very unexpected way. I want it to play.
We all know the best way to enjoy a Corona is with lime. But China, the country where we drink the most beer in the world, is also the country that produces the least limes of good quality in the world. At the same time, more than 20% of our farmers live in poverty. So, instead of fixing the supply issue by simply importing limes, we decided to start a new business. Introducing Corona Extra Lime, a completely new lime brand with the highest quality standard in the market. Finally, hit the shelves all over China, improving the experience of drinking Corona, but also the lives of thousands of farmers, since all profits were redirected to them so they could keep growing their farms. Today, our lime serves not only as an unprecedented medium, it's a sustainable business that is boosting our beer business even further.
This initiative was recognized by the National Council Awards, the National Congress, and throughout the world, making the brand power of Corona thrive like never before. It's the biggest commitment Corona has ever had in a single market. Want a business that bears fruits? Try growing limes.
So in a normal situation, you would applaud for that because it's an incredible idea and done for China, but so it's okay. It's all right. But it's a great idea and a, a genius move from AB InBev. But let's talk about Coca-Cola, right? Now, what they're doing in our relationship with Coca-Cola, that's a all-in network partner. All in, which means we're putting creativity at the center of everything we do: advertising, experience design, data, media, production, social and PR, AI, AI and technology. Let's just be clear, like, Coca-Cola is deep into AI themselves. We're a great collaborator with them, so it's not us bringing them everything. They are actually giving us a lot of ideas and giving us a lot of inspiration to make great work.
The work we're doing, it's improving all over the world, and it's everything from long-form format films with Paramount and Amazon and commerce and retail media. We're doing everything for them. But the most important thing, and the only metric that matters to me, is bold ideas that lead to widely successful business results. So while there's many factors why Coca-Cola ended up here as the most valuable food and beverage brand last year, we think marketing and advertising and our relationship with Coca-Cola has a little bit to do with that, too. And by the way, last year, it was the only top 10 brand to see an increase in value in 2023. So a brand that has fully jumped in to creativity in every one of its forms ends up here.
Wendy's, another example, and you've heard about Wendy's in the past, but, like, what's amazing about Wendy's is that it's a 10-year journey with VML and Wendy's. And frankly, it was an old, tired, fast food brand that VML helped them in collaboration turn into the hottest social brand in America. My favorite part is Wendy's now a giant part of the gaming community, the place where fast food consumers live. But let's talk the language you all love: results. Dethroning Burger King to become the number two burger restaurant chain in America, 12th consecutive year positive sales growth, and nearly 25% average unit volume growth since 2019. So again, I don't show anything that doesn't have amazing results. Now, this is called the One Show Pentapencil. Does anybody know what the One Show Pentapencil is? Yes.
Well, well, you work for us, of course. This is an important award. The One Show is one of the premier award shows, creative award shows in the world. This award, the Penta Pencil, represents the relationship between an agency and a client over five years of creative excellence that's led to exponential growth. So Wendy's won this last year with VML, so pretty amazing. Now, there's been a lot of talk about AI, a lot of talk, from us, from other people. But the reality is, AI is incredible. Of course, we are using AI. We've, we've been using it for, I don't know how many years, seven years, eight years, 10 years, but we're deep into it, and it's gonna do a lot of amazing things.
There's a lot of the advertising we're doing that is going to be enhanced by AI, you know, made more efficient. But here's the reality. This is the world. These are all the apps you can use to create work. Anybody can do. We talked about your grandmother knows about AI now. Like, you can make a lot of stuff. So the reality is, there's gonna be a lot of mediocrity flooded into the market. So AI-generated content doesn't guarantee audience engagement. So while others are in the business of just AI creativity, and maybe they'll get rid of creative agencies, right? We're in the business of human creativity enhanced by AI. And again, we've been doing it for years for our largest global clients.
Now, as you can see, I don't know, you, everybody knows this idea, Serena versus Serena, Never Stop Evolving, from the brilliant minds of AKQA and Nike. That collaboration led to this. This was how we put Serena, through the magic of AI, put Serena in 1999 against modern-day Serena to commemorate Nike's 50th anniversary. Amazing idea. Yes, won them a lot of awards, but it drove engagement for them like they've never seen before. But this is my... I brought a prop. I brought a prop up here. So this is an idea called Access Codes. You know how hard it is to read the instructions? Anybody got eyesight issues? Anybody visually impaired here? I mean, I cannot read this, and I'm pretty decent in my eyes. But what, you know, what Haleon has done, which is brilliant, is actually the packaging has Braille on it.
So if you're visually impaired, it has braille, you can read it. But how do you read the instructions? Sometimes you're putting medicine in your body that's so dangerous, you don't necessarily know, or it could be, if it's overused or used improperly... Like, so the instructions are important. Well, this idea, it was from Grey, part of AKQA Group. It's Haleon and Microsoft working together. So we partnered with Microsoft and their Seeing AI app, and created this thing called Access Codes, where now you can just scan the barcode, and all that pertinent information comes up. So if you're visually impaired, you don't have to worry anymore. That's the kind of work we're doing. This came out last year. But the most awarded idea of 2022, and the most effective idea of 2023 now. So it's the most effective idea. So yes, awards are important.
By the way, awards are the by-product of doing the right thing for our clients, but they are important. They prove that we're landing in culture, it proves that we're driving business, and it attracts talent. People wanna work at companies that are doing well. So Devika is gonna talk about, Shah Rukh Khan My Ad, the Cadbury ad, in a couple of minutes. But the last thing I wanna talk about is the fact that it takes special people to make special things. All this talk about AI and technology, without special people, you cannot make these special things. And the best creative people wanna work at a company committed to creativity. Mark Read has publicly said, "I want to be the most creative company in the world." And as grandiose as that sounds, that ambition is exciting.
We've attracted more talent 'cause they wanna work at creative companies. So it's no surprise that work, which is an aggregation of the number one shows in the world, whether it's Cannes Lions, The One Show, D&AD, the Effie Awards for Creative Effectiveness, the work is very important to us, but really important to our clients. So what you'll see is, not only are we attracting the best creative people, we're attracting the best media people. So we were number one in media last year, number one in effectiveness, yes, number one in creative. So it's important that we're doing the kind of work that is being recognized in the industry, 'cause it's attracting talent, but it's also driving growth. Lastly, before I hand it over to Devika, CEOs make creativity happen.
It doesn't matter if you hire Rob Reilly, if you hire Debbie Vandeven, you hire Gabriel Schmidt or Andrew Keller or Liz Taylor. If you don't have a CEO who cares about creativity being the main ingredient for driving growth, you won't win. So I'd love to hand it over to Devika, who not only is one of those people, she knows how to win a hell of a lot of business with creativity.
So our mission at Ogilvy is quite simple. You saw that data point that Rob showed you with McKinsey? We wanna be living proof of that. Living proof that the most effective creative work unlocks growth for our clients. The truth's simple today, right? There isn't a single client of ours that has actually any product differentiation. We're living in a hyper-commoditized world. And in that hyper-commoditized world, creativity becomes the force multiplier. Creativity becomes the thing that differentiates them, that unlocks new markets, new target audiences, and new opportunities for growth. It's earning season, right? And our mission... Now, we do watch our awards, and I'm gonna talk about that in a minute, but this is what we look at. This is what we sweat. We sweat the fact that we can take Dove from being a billion-dollar brand to a multi-billion dollar brand.
Corona went 29% increase in sales. Samsung Foldables, one of the fastest, fastest introductions of a new product in the marketplace. Getting new subscribers for Verizon. Helping IBM grow their business. This is the value of creativity, and this is our obsession at Ogilvy. And it's this obsession, frankly, with using creativity to unlock value for our clients, that's put us on the top of our game here. We're number one in creative excellence, according to award reports that Rob just talked about, and number one in effectiveness. This, by the way, would be the second place you clap, but I'll keep moving. All right. So I wanna use one case to show you exactly how we do this. Right, and let's talk a little bit about Mondelez, who we if you think about Mondelez pre-2019, the world of 3G Capital, right?
We've all sort of heard this phrase, right? "Buy, squeeze, repeat." We're all familiar with that. It goes with zero-based budgeting, and it goes with cost-cutting. But Dirk Van de Put came at the end of 2017 and actually had a growth agenda to grow the company and return it to being vibrant and vital for its consumers and from a business perspective. He hired Martin Renaud, who made brand innovation and creative transformation the agenda of how to get the growth. And this is where we, as WPP, came in, around the end of 2018, early 2019. So how did we do it? What was our creative transformation journey with them? Actually, quite simple. And Daniel took you through what I'd say, the second bit of it, is the cutting edge side of intelligence.
But our mission really was to take imagination and intelligence, and make them come together. I know, I know what you're all thinking right now. You think creative people sit in a room with their hair flying... Sorry, Rob. with their hair flying, and imagining things that nobody's ever imagined before, and becoming hyper-passionate about that. That, by the way, is true. But the creative process also requires intelligence today. What is the form of intelligence that we look at? It's really important for us to be intelligent about culture. You know, when we look in, when we're sitting in these corporate environments, we often talk about categories. "This brand lives in so-and-so category, and here are the category dynamics." Consumers do not live in categories.
They live out in culture, the culture of sports, the culture of entertainment, the culture of music, the culture of food. So being really intelligent about that culture, having that cultural insight, is of supreme importance. Data. Personalization at scale is very, very important for Mondelez, and it's becoming increasingly important for most of our clients. So how do we target the right person at the right time with the right message, and make it meaningful? Becoming increasingly important. AI and tech, and we've talked a lot about it, and I'm gonna show you another example of how we use it. But today, human beings and the human imagination can imagine new realities that they couldn't earlier. But by the way, technology alone couldn't do that.
And media, we talked about personalization at scale, so if we don't work with Christian Juhl and all his teams to figure out where we put that message, not simply just broadcast it, but where do we put it at the right time, again, becomes mission critical. And this is the formula that we've been using for Mondelez, and it has led to a piece of work that Rob mentioned, which is Shah Rukh Khan My Ad. Let's see it.
Big brands have big money to hire famous people, but not the small guys, and they are the ones who are still hurting. Presenting Shah Rukh Khan My Ad.
Please welcome Shah Rukh Khan!
He almost certainly has more devoted fans than any other movie star in the world.
Biggest movie star in the world.
Forbes have called him one of the biggest movie stars in the world.
We helped small businesses by making Shah Rukh Khan, the world's biggest movie star, their brand ambassador.
... "... It's Diwali, up Bina and the Paswale Fashion of Emporium, Sahe, shopping center. Siddhi Vinayak Electronics, say, latest smartphone, Karika, marketer selfie post Karna.
Kya kar rahe ho? Meetha laaye-
We used machine learning to recreate Shah Rukh Khan's face and voice to take the local store names in the ads.
Up Bina, the Paiswaale Choice of Fashion, Sai, Kapur shopping. Royal Fashion, Sai, NK Cloth, Sai, Paiswaale Lakshmi Collection, Sai, Kapur Kishor.
Different versions of the same ad with local store names were targeted as per the pin code of the viewer, showing them only the nearby stores. But it is impossible to cover all the stores, so we gave the power to the people to create their own version of Shah Rukh Khan, My Ad. Any small business owner could promote their stores through their own social media networks, like WhatsApp forwards and other social media pages.
It is Shah Rukh Khan selling your store, man. If you're a small-time retailer or a merchant, what an amazing thing to have!
Cadbury Ad is an ad campaign that has gone viral. A new ad, which stars Bollywood superstar Shah Rukh Khan, is winning hearts all over social media. What we're learning is that over 100,000 local stores have already created their own ad, which Shah Rukh is a brand ambassador.
Celebrations Diwali ad.
Shah Rukh Khan, My Ad.
Anybody know Shah Rukh Khan here? So I've been trying to think of, like, how would I describe who Shah Rukh Khan is? And it's almost like you take Tom Cruise, Brad Pitt, Leonardo DiCaprio, and you sort of put them all three together. Actually, that still doesn't give you Shah Rukh Khan. I think if you put a little bit of Daniel Craig, then we've got Shah Rukh Khan here. The biggest star, not just in Bollywood, but I'd say one of the biggest stars all over the world. And it took imagination and intelligence for somebody to imagine we could get the biggest star in the world to help the smallest person on the streets in a moment of COVID, where the brand, the brand grew 35%, but the business at the local guy also grew dramatically. That is the value of creativity.
Now, we don't just do this for Cadbury in India with Mondelez. We do it with Milka in EMEA, as you've seen, and the amazing sort of example that Daniel talked about. We do it with Lacta in Greece, we do it with Philadelphia Cream Cheese in the U.K., and we do it with Tang in Brazil, and we do it with a whole lot of other brands, using the same formula, using the same kind of creative thinking to make sure that we're driving their business forward. This has led to some incredible results for Mondelez. They've gone from the number 19 most creative brand in the world, so to number seven. They've gone from number eight effectiveness to number four, and number 20 in media excellence to number two....
But what's most important, they've seen a 30% lift in their ROI when it comes to personalization at scale, and they're investing more there. They've seen a 36% ROI overall in their marketing spend, and they're looking at a 10.1% revenue CAGR as they look at their overall business. Now, that is the value of creativity, and that is a perfect marriage of imagination and intelligence, which has been our formula for success, a perfect marriage of a client and an agency. And it's when we can take, and we go back to the 3 G thing, if we can take this model and do a rinse and repeat, as opposed to a zero-based budgeting and a cost-cutting model, right? And we can do it in China, and we can do it in the 75 markets that we exist in.
We can do it for big brands, and we can do it for smaller brands, right? That's when this happens. And no, I'm not announcing that Ogilvy's entering the NHL with a team, and nor is this a branded hockey stick. This is 11 quarters of growth using that formula that we've been working with Mondelez on. I'm now gonna hand it to Ajaz, who I'd say one of the leaders and the visionaries in taking creativity, technology, and design, and putting it to work in ways that we've never seen before.
Fantastic.
Come on, my friend.
Inspirational.
Thank you.
Every now and then, if you're really lucky, you get the chance to create work that helps you shape the future. That's why the privilege of my life has been the opportunity to serve as AKQA's founder and CEO for the last 30 years. In that time, we've won Agency of the Year honors, an unrivaled 81x across multiple AKQA studios and disciplines, reflecting the strength of our network and AKQA's pioneering spirit of breakthrough innovation. It's not just the work, but our culture that's also recognized. Just last year, AKQA was named the 9th most loved workplace in the world by Newsweek. Another example of AKQA as an employer of choice is that we also receive between 12,500 and 20,000 job applications a quarter from people who would like a career at AKQA.
AI can do a lot of amazing things, but it can't quite yet create a culture. The reason for this recognition is we have the best team we've ever had at AKQA, and the most diverse. We have 5,500 people and a five person global leadership team. Three are women, two are men, and two are people of color, making AKQA one of the most diverse leadership teams across our industry. In the last 30 years, we've all witnessed the massive and incredible transitions in the business and marketing landscape, which has expanded the canvas for agencies and the significant opportunities for clients. Some big evolutions include the transition from broadcast and interruption to the creation of indispensable services, and therefore greater customer engagement. The maturity from transactions to relationships, fueled by data and predictive analytics.
Customers have become members due to personalization, brand ecosystems, services that anticipate people's needs. The most exciting and the most disruptive is where mechanistic, mundane, repetitive, labor-intensive work has become optimized and automated by machine learning, enabling humans to do the higher-level thinking and provide more space for ideas. We've been in the fortunate position to help our clients navigate and embrace and maximize the opportunity. This increases our relevance and expands our connection with clients. Not only has AKQA been in business 30 years, but we've proudly built relationships that also span decades, contributing to their growth as well as our own. This is our 25th year working with Nike, and we've collaborated on many world firsts and thousands of projects, including designing NTC, the world's most popular fitness app, that gets billions of minutes of connection every year.
It's based on the simple and democratic idea that not everyone has a personal trainer, but everyone has a mobile phone. Like diversity, sustainability is another priority for all stakeholders. We were delighted to collaborate with H&M to create the in-store experience to transform old clothes into new pieces. We teamed up with Disney to create the Disney guest app for the happiest place on earth, which, apart from Finland, is, of course, Disneyland. We've proudly worked for Rolls-Royce Motor Cars for 10 of their 118 years on a variety of projects, including their digital design system. Luxury is a category specialization for AKQA, and we've had the honor to work with LVMH for a decade of collaboration across multiple Maisons.
Clearly, AKQA are the most important initials to me, but for our industry, it's AI, of course, and instead of artificial intelligence, we think of AI as being augmented intelligence, as it's a great productivity partner for our people, and it's become the perfect partner to help us maximize the productivity of our client investments, too. Over many years, we've applied AI in myriad ways, but the application I'm most excited about is we've recently helped a retail fashion client grow their revenue by 33% over the last 12 months, with 98% accuracy in where and how to invest using our proprietary model. What this demonstrates is that AKQA has innovation in its DNA, continually being at the forefront of many of the revolutions and disruptions that are transforming our industry and the operating environment of our clients.
The reason our work connects is because the defining characteristics of everything we do is the imaginative application of art, where we focus on craft, story, beauty, vocabulary, science, where we focus on new technologies, experiments, data, analytics, methodologies, and best practices, and soul, where we focus on emotion, intuition, humanity, generosity, and vibe. In a world where AI and new technologies are powering ahead at unrelenting speed, it's our belief that human creativity will be even more important and even more valued, and that the most powerful force in the universe isn't technology, it's imagination. When you're in the business of helping clients to create the future, there really are no limits to opportunity and growth. Speaking of growth, I'm delighted to introduce Richard Glasson, who's led Hogarth to remarkable growth for WPP.
So I'm delighted to talk to you today about Hogarth, which is one of the companies within WPP that you might be less familiar with. We're the making part of Hogarth. We're the production business. And while when you think about making, you think about production, you might immediately think about shooting and editing TV commercials, actually, it goes... all of our clients have much wider content needs than that. And so thinking about what that looks like, here you can see some work that we do with Apple, which is a client that we've had for 13 years now. The reason I think, production is such an exciting place to be at the moment is because all of our clients have to think about how they can produce work at every hour of every day.
They have to produce work across every channel. They have to think about their different audiences. They have to think about different markets, different cultures. You can respond to things that are going on in the real world. You can take real-time data coming back from, from various cues. You can respond to changes in weather. You can respond to the time of day. So what that means is that all of our clients have a virtually limitless need for data, for work across every channel, and that creates a huge opportunity for us. We're also helping our clients to innovate into the future, to think about different ways of making work, to use emerging tools and technology to ensure that their work is capable of addressing the changing needs of their consumers.
We can now talk to consumers and engage with consumers on behalf of our clients in a way that simply wasn't possible in the very recent past. And again, that's what's creating the big opportunity for us, and that's why we believe that production is an area that everybody should be taking very seriously as a business, and why Hogarth represents such a large growth opportunity in the industry and for WPP. We're also an engine for integration within WPP, so we work with all of the creative agencies that you've seen here today, and we have a deep integration with GroupM.
You can think of us almost as the connective tissue across WPP, which enables WPP to offer true end-to-end capabilities and brings together creative and production and media in a simple and compelling way for our clients, in a way which I don't think is replicated elsewhere in the industry. And it's that sort of integration, combined with our incredibly strong direct-to-market offer, which again, I believe differentiates us, which has driven our extraordinary growth. So Hogarth was a start-up just 15 years ago. When WPP invested in the business in 2010, there were fewer than 100 people in the company. I joined the company just a few months after that, and from that point to the end of 2023, we grew by over 60x in every key measure.
So we've had a compound growth rate of over 10% for our entire life within WPP, and we expect that to continue as we move into the future. In scale terms, as a business, we anticipate that growth really driving us forward, because scale matters in production. We recently completed the consolidation of various other parts of WPP, various production entities which existed within WPP into Hogarth, which now means that we're 7,500 people globally, which actually makes us probably more than twice the size of our nearest competitor. It means that we're very clearly the market leader in the world of production. The reason that I believe that matters is that production, up to this point, has been a highly fragmented market.
It's been a market with a lot of boutique suppliers in there. And actually, the consolidation is really starting to happen because the consolidation is necessary for our clients, because they need to have access to the best innovation. They need to have access to the tools and technologies which we're developing, and to the partnerships which we're embedding within WPP, and within Hogarth. And if we conservatively estimate that the global production market for advertising, and I think this is a very conservative estimate, is $50 billion, and then you look at the size of Hogarth, and so carrying on existing growth rates and taking where we are today, we should expect to be about $1 billion of net sales in the next two to three years. And so we're looking at maybe 2% of that $50 billion.
If you look at the market share that WPP has, then actually that creates a huge opportunity for us, particularly given that I believe that the tools that we're building and the ways that we're working with our clients is driving genuine differentiation and genuine competitive advantage. So an example of that could be this, some work that we're doing with our partners at VML on Ford. This is a real-time configurator that we built using NVIDIA, Omniverse, and AI technology to build an end-to-end CG pipeline. So our craft experts in the world of VFX, using these cutting-edge tools and technology, now are creating real-time configuration, which completely changes the way that Ford can talk to its clients. It connects engineering to advertising. It connects advertising to commerce. It allows for completely bespoke and unique experiences.
And then, you know, working with VML, working with GroupM, all of whom are obviously key partners of Ford, we're able to bring this to life and create engagements that have never been seen before. So my message is really simple. My message is very straightforward. We think that Hogarth is a very strong growth story for WPP and in the industry. We've got completely unmatched scale, we've got unmatched breadth of capabilities, a differentiated model, whereby we work very, in a very integrated manner with all of our partners here at WPP. We have access to all of the WPP clients, but we also, as I say, have a very strong direct-to-market offer.
We've got a huge runway ahead of us in terms of the foundations we've laid in the business and the growth that's ahead of us, and we strongly believe that we'll be an engine for growth for WPP in 2024 and beyond. You've got my word for that, Mark.
Very good. Thank you I'm sure we do. Thank you, Richard. So, look, I think it was worth spending a little bit of time on the creative part of our business. I think if you think about getting to 3%+, we're only going to get there if we can get our creative agencies, you know, growing more strongly. And I'm sure we'll come onto that a little bit in the Q&A. And I hope you took away from that session, you know, the three things we wanted you to you know, we do a lot more than just the ads. You know, production is a big growth opportunity, and thirdly, that AI is gonna transform how we work creatively, you know, largely in a positive way. So that's sort of the second stage.
The third stage is really around building world-class, powerful brands, and we're delighted to have both VML and GroupM show you what they're doing. Jon and Mel, come up and talk to us about, you know, what's going on at VML and why you're excited to lead it and get the VML name back.
Yes.
We are, we are excited to talk about it. It's a good word. But Mark said VML is a new company. You said that earlier, Mark, and we're still getting used to that being a new company, because VML is certainly, as you know, born from some very established companies, VMLY&R and Wunderman Thompson, the companies that we come from. So getting used to that being new is true, but it certainly is, and we can't wait to talk about it. I'm Jon Cook. I'm the CEO of VML, and Mark showed that chart of our executive team up earlier, and I had 28 years on there. It made me feel really old. I'm really not.
But, yeah, 28 years, and you get a lot of people asking you, you know, "That's a long time to be one place." But honestly, the chance to reinvent, the opportunities WPP has given me and all of us, it's the reason I'm here, and I couldn't be more excited now in my 28th year than I've ever been, to be part of things.
Hi, everybody. I'm Mel Edwards. I'm the President of VML. I came from the Wunderman Thompson world. But we are super excited to tell you a little bit about the company today. So, we announced VML on October the 17th, and we launched VML on the 1st of January. So in three months, we've been a bit busy. We've definitely got a few gray hairs now between us, but we have spent that time really going to our clients and talking about the power of VML and what we can now bring. But similarly, we've also been announcing our leadership team, and as well as integrating a company, we have put together a fantastic, diverse leadership team, globally, regionally, at a capability level. And also, we've announced every CEO across every market, and we have 60 markets.
... Yeah, and we mentioned October 17th. That seems like a long time ago. It really wasn't that long ago. It's been a busy couple months merging VML, and we thought what we'd start with... There's lots of reasons. The simplicity, the scale. You know, a lot of the headlines were certainly about the scale of VML to the point where it's like, "Please stop with the scale," when those headlines came out. Those are. We're gonna talk about the power of scale, the power of simplicity, and certainly the plan for growth. But where we're gonna start is to give you a little insight on why VML was born, the opportunity we saw to create something special. You know, if you look at, as we mentioned, we've both merged companies these last five years. They've both grown.
Both Wunderman Thompson and VMLY&R have grown well since 2018, and one of the reasons, including those, those COVID years, that we both created growth, was we went beyond advertising with our creativity to go into advertising, customer experience, commerce, deeper into technology. It created a diverse set of capabilities that let us grow with our clients in unique ways. And so when we looked at the fact we both have that, and if we could combine that, there's something powerful. We looked at CMOs, CEOs, our clients, that were wanting their, their brand advertising to be closer to their commerce. Even if those were different organizations internally, that connectivity was something they wanted closer to their customer experience. We looked at our competition. If we looked at, consultant competition, we have a lot of respect for that competition, but all certainly trying to acquire creativity to...
By building it, hiring it, buying it, to mixed success. We look at our advertising agency competition outside of WPP, and a lot of fantastic creative agencies, like, like we are, but adding... trying to rationalize how to add technology, commerce, et cetera, to mixed success. We had the chance at WPP, because of what we've built and how we've grown these last five years, to do that right from the jump, at scale, around the world. So that's... And what that now looks like in the new VML, we call it connected creativity, and a lot going on in VML, but a very simple chart that describes what we do, and it's, it's creative to build brand- creative agency to build brands, that combines brand experience or advertising, customer experience, and commerce.
That, in a lot of our competition, might be something that there's one person doing this or a small group. It might be three different companies for some of our clients. Our secret sauce is the ability to do that together, all as one, harmoniously with creativity. So what that might look like, we're using a lot of, a lot of terms there really quickly, but brand experience is what you'd expect from an advertising agency: advertising, campaigns, content, storytelling. Customer experience, which is, simply put, the way that you bring customers and a brand closer together through experiences, whether those be digital experiences, applications, custom content. It can take a lot of forms. That's customer experience. And then commerce, which is now end-to-end, the ability to invite people to a transaction creatively, all the way to the systems that power commerce. We do all three of those things.
It's not three different companies within VML, but three practices working together. Creates a good growth on-ramp for us because we can go in through any of those doors. A lot of the opportunities present themselves in those doors. We come through one door, and then we can expand. We've had a good track record of doing that. Or, as the future becomes continuously one, we can come in as one. Either way, it creates a good growth pattern for VML. So this is. There's a lot happening in this chart, but a quick way to look at that, this is what happens in some of our opportunities. There may be a situation where we're doing fantastic customer experience or product work for someone, but the brand experience, the advertising, doesn't make the right promise for that.
We're able to then create that brand experience to bring that on par with the customer experience of the product. Or we're doing fantastic storytelling about a brand, but when you get to the product, it's a subpar experience. VML can then bring that customer experience up to par and create that expectation on equal measure. This is what VML was built for: to create fantastic stories about brands, to unite the products and the experiences you have with brands, and then because of all that, to create the transactional situation to buy and spend more money with those brands. And to do that, we have to have creativity through all of it. I think there's maybe some of our outside WPP competition that would consider creativity just in the advertising. It has to go through all of it.
So VMLY&R and Wunderman Thompson, both highly awarded creative companies, just last year alone, the number one agency in the year in all these shows, and then just in December, The Drum named us the Creative Agency of the Year, the same show that WPP was named Network of the Year. Creativity, world-class creativity, has to power all of it.
The second reason we formed VML was simplicity. If we actually took our top 30 clients, and 85% of those we shared between the two previous companies. And now we are showing up to those clients, and every single client around the world, as one brand, as VML. And the reaction from our clients has been fantastic. They were super excited. They want to see the value of VML and the power that VML can bring. And we had to hold our hat behind one brand, and we stand behind these amazing advertising giants. You know, JWT, it was founded in 1896, Wunderman in 1958, and VML is the baby, would you believe? It founded in 1992.
But we thought we needed one name, and we could have smashed all those together to create a brand, but I, for one, as Mel.Edwards@WundermanThompson.com, going to Mel.Edwards@VML.com, it's changed my life. So we have gone with VML. We think it's the forward, forward-facing brand, and we think it's a brand that can take us forward in the future with the amazing capabilities that Jon's already set out. But we have also simplified it for our people as well. So we have over 30,000 people globally, but now they are all sitting behind this one brand with these three practices, showing up to our clients just with this one single name, VML. And that's super powerful, and we're seeing that already coming through. Third reason, power of scale.
Yes, we are big, and I think the value of that for our clients in particular, is that we have so many people that are experts, not generalists, experts, and therefore, they can go to our clients, and we have the volume of people to be able to deliver the work. But there are also, What also comes with power of scale is efficiencies and savings. Now, this is our integration playbook, and you might look at that and go, "But Mel, there's lots of Latin on this slide," and you would be correct, there is. Just purely down to the fact that there's lots of confidentialities that sits behind it. But this is the playbook that we have used to integrate our business. But one of the key reasons with scale brings efficiencies and savings.
One of the things that we have been doing is looking at how we drive efficiencies through regional and global synergies from a back office perspective. How we are using our nearshore and offshore hubs to send more work to make more efficiencies. Similarly, from a real estate perspective, if you think we're in 60 markets, we're now sort of consolidating from however many offices down to a more slimline version. So here, even in the U.K., we're going from two offices down to one, and all of those efficiencies are going to drive GBP 50 million of savings. I'm not gonna go into any more detail. Joanne's gonna pick that up in the next presentation on finance, but that's what we'll be able to deliver from an efficiency perspective and a savings perspective coming together as VML.
Yeah, and all this designed to create a better growth platform, to kind of repeat the success we've had from growth in the years to come. So we will talk about our future of growth, but there's a lot we can learn about what we've done these last five years that will help guide us to the future. Okay, so a lot on this chart, but this is the four years after each of us merged in 2018. This is a combined annual growth rate of each of the two companies that come together on one page. And so it's a couple of things that I'll point out here, and first of all, that growth rate is strong in both companies through those four years. Now we both...
The industry hit a lot of headwinds in the second half of 2023. Seems like a long time ago. We were not immune to that. We have a lot of tech clients, and we, we certainly felt that as agencies as well. But it's part of a story of the last five years of growth, for sure. Second thing I'd point out is, as we created growth, we also created simplicity and made brands that were losing relevance or losing steam from a growth standpoint, gain acceleration. In the red, you can see brands that both became part of these new companies that had, you know, subpar track records come together into an aggregated set of growth. And it's, it's.
The third point I'll make is there's a lot of lessons learned from how to do this, because creating the work that goes into a merger, both culturally, operationally and in our offering, to do that work while creating growth has been something we're really proud of, and that's our expectation for what we'll do next with VML. So lots of reasons we created. Hopefully, that gives you a good behind the scenes of the concept of VML. I shouldn't say concept, it's very real-
Very real
as we stand here. But I think, you know, simply put, the reason we're doing it is to do better, simpler work for our clients. And Ford's been mentioned a lot. You heard from Andrew Frick quickly in the video. 80 years, as Mark said, of relationship with Ford. These are the kind of clients we built VML Ford, a simpler and more powerful offering. And we'll talk about what VML does for Ford specifically, but before we do that, this is a large WPP client, a large relationship, and we wanted to show you just a schematic of how WPP works for Ford. It helps define Ford, but I think it's a good proxy for the way we work with a lot of big brands at WPP. Always a global client leader or GCL, uniting the entire group of us behind one relationship.
A set of agencies working together to deliver creativity and everything we've just talked about. In a lot of cases, like in Ford, VML plays a lead role. That could be different agencies in WPP, but usually, all of us are working in some sort of harmony on a large client, but always working in concert with the media part of WPP GroupM. So that's, that's that. Then, as you heard from Richard, completely supported by global production. That's how we work. Everything with Ford we do as an agency is produced then by Hogarth, and then AI-driven tool set, WPP Open, that lets us... You know, you saw a lot of charts and demos. At the end of the day, this lets us do our jobs better and create better work.
I can tell you in that history of time that, you know, as maybe 2018, 2019, this would have been a lot messier, because a lot of us were repeating a lot of these things at WPP in these last five, six years, to have that singular, simple, and have great relationships between the individuals involved. I can't tell you how much easier and more powerful that makes our job. So that's the WPP landscape on Ford. From a VML standpoint, it's a, it's a good microcosm of the offering that Mel and I are describing to you. The idea of these three things working together, it's not just what we do, it's the expectation of Ford that these connect. So, sometimes we'll start with advertising.
In this case, we wanna show you customer experience first, because I think that's maybe, it's maybe one of my favorite parts of what we do. At Ford, it's all the experiences we're creating around the world to unite dealers and consumers, to take Ford owners and make them closer to their car, or to take Ford prospective customers and get them closer to a buying situation. This is what customer experience looks like at Ford.
... So VML is very much responsible for the ownership cycle, that customer cycle, CRM programs, loyalty programs, but we also help drive that transactional process for the customer or the consumer as well. So we are heavily embedded in commerce with Ford. And what I mean by that is we are creating services like the pickup and collection delivery service from Ford. We have created and built the mobile payment platform at Ford, as well as the configurator that you heard Richard talk about, but we are also transforming their supply chain as well. So we are really deeply rooted with our capabilities into one of our largest clients.
Customer experience, commerce, and there is, yes, still advertising. So as part of the equation, advertising for Ford is fantastic, and it's a great opportunity to not only do great work, but to tell the stories about those products that we just showed you. We're gonna show you a TV spot that we did for a product called Umode. It's a personalized set of services that Ford owners have access to. Within Umode, there's a product called BlueCruise. It's a self-guided driving program. You know, a lot of technology behind it, a lot of customer experience. It's also part of the commerce. But at the end of the day, something that beautiful doesn't need a lot of words to tell you what that means at Ford.
And everything we do with Ford is powered and enabled through data, technology, and AI. Through the amazing configurator we've built with millions of pieces of content. I said trillions the other day and everyone was like, "It's not trillions.
Multiplied.
It's millions. But all of the personalization we can do with the work that you heard that Daniel spoke about, that personalization that can go to a customer level and engage them further, is all driven through data technology and our AI. And I think this is the power of VML. This is the secret sauce that we have created, with being able to go to one of our largest clients at WPP and VML, and be able to deliver brand experiences through to customer experiences, and all the way through to a transaction and a purchase with commerce.
Yeah, you said it, Mel. Secret sauce. We've been spending a lot of time together these last months, and one of the conversations we had is: what is our role as agency leaders in WPP? And, you know, it's a challenging job, it's a great job, and the job is to not only create relevance as an advertising agency, but to sustain relevance. And it's been choices about capability that's make that sustained relevance something we're proud of and excited about. Now, we're gonna do that in creating VML. At the same time as creating that offering, we're gonna save a lot of money through efficiencies, and we're gonna create a great future for growth. We're excited about VML.
Now, as mentioned earlier, that VML, as with all the WPP agencies and every large client, we connect with GroupM and our media offering. It's a fantastic relationship. Nobody better to talk about it than Global CEO of GroupM, Christian Juhl.
Thanks, Mel. Thanks, John.
Oh, I'm giving you the clicker.
You do that. Sure. Thanks, buddy. Hello, everybody. My name is Christian Juhl, as you said. I'm the Global CEO at GroupM. The last time I was here, I think I talked to you guys about the profound effect of technology on media and advertising, and I tried to explain to you how we were doing search campaigns that used to take two weeks in about 20 minutes. Does anybody here remember that? Okay, John remembers it. I talked to a few of you at lunch, you said you did. Nothing has been more true since that time, that technology has absolutely changed the face of the way we think about marketing and advertising and media, and you've seen so much of that today.
I've been asked to sort of explain sort of what GroupM does before we even really get into the mechanics of it. So let me give you a quick 20 seconds on media. There's really three different components to it. There's our customers, of course. You've heard from many of those today. There's the supply side, and these are the folks that actually make all the content in the world that advertising runs adjacent to. This could be everything from TikTok, to out-of-home, to newspapers, to the television spots, to the wonderful Super Bowl with my hometown, San Francisco 49ers. Anybody? Figured, wrong audience. Then there's actually the brands that want to connect with all these consumers through that.
And what we do is play the most important role in the world for connecting those media owners with the brands and consumers, so that we can shape what those experiences look like. That has never been more complex than it is today. I want to spend just a couple minutes talking about the industry and where that is... Once I finish about the industry, we'll talk about GroupM's place within it and how we look at that, and then in my quick conversations, many of you, I want - I know that you guys wanna hear how we are planning to grow and what that looks like specifically around the world. First, a second on the actual marketplace right now.
There's a $900 billion media marketplace out there, and when I predicted technology was gonna have this profound effect upon it, I probably even underestimated it at that point. So when you look at what's actually happened in this, there's digitization that's happened at an incredible rate. So you hear all about, you know, everything that's happened in that space. We're now at a spot where about 50% of all the advertising revenue that's out there is digital. Of that 50% that sits within there, the vast majority of that is being bought programmatically, and in your world, that's like a high-frequency trader.
So if you think about what we're doing, we have shifted the role of planners that used to sit there with fax machines and actually putting in insertion orders, calling your local papers or your publishers, to those that sit with hands-on keyboards, have to understand algorithms, artificial intelligence, all the technology systems to get the exact impression into the right consumers at the right time. It's an incredibly complex job when we do that across 82 markets globally and for the likes of brands like Coke and Google and Ford. Now, streaming is also another big influence in this place. So you've seen linear programming, and you have that, you know, locally in all the different countries around the world, but now you've got the likes of Hulu, Amazon, Disney+ , Peacock. Pick your service.
You probably all have more than you want at this point, but that allows a different type of formats to come in that looks more like digital, but streaming on linear platforms. That, again, adds more complexity to the space and more opportunities for brands to interact with consumers. Now, I think long term, when we look at the space, you're gonna see probably less opportunity as they reduce ad loads to increase competitiveness in the streaming service, which is gonna mean more emphasis on ways that brands can interact as the amount of available ad time, if you think about it that way, comes down. Now, you're seeing some of the people when they come on Netflix, they talk about their ad-supported models, less ads per hour. That means that things like events, where culture, music, live, these types of things are gonna become really important.
Mark mentioned earlier we have 19 spots in the Super Bowl this year. That's great. It's an all-time record for us, but that's only speaks to the strength of live and sport and what needs to happen as people are looking to make mass connections in that space. You're looking at ad-free models still. So I just talked about the shrinkage of time that we have available to connect with consumers. We have to make more of that time as that comes down. I still think we have to look at the government as well in this space. We're seeing regulation come in. We're seeing a lot of potential challenges for some of the strength in the marketplace, so we'll have to keep our eye on that as well as that looks at complexity.
And then finally, and I think this is an important part, consolidation of ad revenue into global platforms. So this takes a look at our own forecast that we put out for this year and next year. This talks about by 2030, the top two players will account for about 47% of ad revenue. I mean, that's remarkable. The earlier part when Mark was talking about how much data can any one holding company have, nobody can beat the amount of data that Google and Meta are gonna have. It's just impossible. So you look at that amount of revenue that sits within there. What that means on our side, as we sit between them and brands, is that we have to be masters in these universes. We've got first to markets with Google, first to markets Meta, first to markets with Amazon.
Our scale as GroupM has meant that we have access to this that really nobody else in the space does, and that's really important for us to be able to make the meaningful connections between brands and platforms that our customers rely on us for. So where do we sit within that space? I wanna shift and talk about GroupM specifically a bit. So GroupM does almost $64 billion in worldwide ad revenue. Our closest competitor does $45 billion, and that's important. There's a lot of different reasons that scale matters. First, our global footprint, that allows us to service in the 84 markets around the world and the hundreds and hundreds of cities that we service to be able to take campaigns and put them out locally.
It's tempting to think that with the advent of all these big platforms and how globally consolidated everything is, that you could run all this through hubs, and trust me, I ran a digital-only agency for a while, and I used to talk about the power of hubs. The truth is we're still 50/50, analog, digital. To be able to run local newspaper, local television, and to be able to create those brands in a full holistic manner, you need to be in the markets where these brands want to win, and most of the growth comes out of Asia right now, where we're by far the number one market, and we have an incredible footprint there to be able to land the brands where we need them to be.
The second point, and this is also very, very important, so one is scale, but the second one is around how do you have collective intelligence? And I think about this in terms of collective intelligence being, we do $64 billion around the world. That sounds great. It's a big number. The difference between $64 billion and $40 billion, the number two person, is trillions of daily campaign data points that we get in order to understand through our systems, that Stephan talked about earlier, how to predict performance and how to deliver higher overall return on ad spend than anybody else in the industry. That is the scale. That's the flywheel that we start to get into. Pricing advantage, of course. You come to GroupM, we're big, we get great pricing. That's really important. We continue to provide that around the world.
Leadership, AI, and data, you saw a bit on Choreograph. Evan's over here, my friend and the CEO of Choreograph. He's gonna come up and give you a demo in a second. Talent, I mean, GroupM builds great careers. We have multiple brands. We have an incredible company. We are leading in this space. People come to GroupM, and they stay at GroupM. Those global giants we talked about, we're the number one customer for all of those platforms, so we get to meet with Sundar. We get to go through and look at where their roadmaps are going. We have incredible influence. We talk to them. We are the leaders in talking about privacy, viewability, carbon neutrality, all the different issues that affect the media industry. We are at the table helping to drive that agenda.
We have global CMO relationships with all the top brands, and we basically get included in every global review that goes out. That's what scale gets you. That's why I'm at GroupM, that's why I love it, and that's why our 44,000 people are here. I mentioned our clients, we're really proud of them. I wouldn't be up here without them, so I just want to take a second to say thank you. These clients are the ones that trust us with all of that money.... You think about the way that they actually connect with their consumers, of what it takes to make sure that you get the right ad at the right time, in the right place. It is no trivial responsibility that we set, and I thank them for everything that they've done, and it's an incredible roster.
I like to say I kinda get to work on a new job every day, and that's because of this. When you look at the variance of what we have, the types of clients that have been challenging the industry and defining an industry for so long, it's a great job. Our agencies, we're incredibly lucky to have three of the top five agencies in the world. We've got EssenceMediacom with almost $25 billion. You've got Mindshare at $22 billion, and Wavemaker sitting at $15 billion. Each one of these agencies wins numerous awards every year in different categories for being the number one in their space. Our work, it's quite simply the best in the industry. I had the honor of being the president of the Media Lions this year at Cannes.
I say, "honor," it's kind of a responsibility, an honor, and a, and a job. You go in about a week early, and you sit in a windowless conference room, and you look at thousands of pieces of work with your... basically, other people from the industry that don't work with you, or your competitors in many cases. The piece of work I'm gonna show you is actually from Dove, and it has the benefit of being, both a Mindshare client and an Ogilvy client, but it won the Grand Prix. And with that, Mindshare won actually Agency Network of the Year this year in 2023 in, in Cannes. And at one, we sat down as the media, we said, "What makes great media work?" We really wanted to be specific about media in itself.
We said, "It's an emotional campaign," you'll see that, as I show it we share it with you. But really, when you look at it, the use of technology, the global scale of it, the localization of it, the integration across all different media channels, we were able to put over 1 billion views of this worldwide when we did the campaign. And when you look at the ability to actually look at how we managed it over time, so that it continued to sustain and build and wane and come back through all the different channels that we used, it's a really impressive piece of work, and helped drive significant sales for Dove.
This is not what I look like right now. This filter should be illegal. Here's the real me! My gosh.
A new beauty trend going viral on TikTok.
What's the filter called again?
Bold Glamour.
Bold Glamour. Bold Glamour. Bold Glamour.
There's practically no way to tell that I've got a filter on. I can move about.
Unlike traditional beauty filters, every pixel on your face is regenerated.
The beautification filters can cause psychological distress.
I worry about how this impacts young girls' confidence.
It is time to turn our backs against digital distortion.
We're not just doing it for our family. We know there's other families, we know there's other kids out here that's watching, that's listening.
The hashtag Turn Your Back is all over TikTok right now.
I'm turning my back to digital distortion.
Turn Your Back.
Turn your back. I'm gonna go one better than turning my back on this.
I think these filters are here to hurt us, and I think it's time we turned our back on them.
I don't like it either. You know why?
Why?
'Cause it doesn't look like you. There we go.
I always have to look away after seeing this for, I don't know, hundreds of times at this point, I think. 'Cause you think about for those of us that have kids, what's happening and how the social media filters and what it can do, and how it distorts your own self-image, it's a powerful message. Ogilvy nailed it well. We were just happy to be the partner that could distribute that message around the world and help amplify it to those platforms. So that's a bit on the industry, and that's a bit on GroupM and our place within it. Let's talk a little bit about what our ambition is and how we're gonna deliver that for you.
So, as I said, we're No. 1 in EMEA, we're No. one in APAC, we're No. two in the U.S., No. two in Latin America, and we need to do a little bit better than that. So we're gonna come on to exactly the U.S. plan. So what about our investment priorities? So I think by executing this, we'll be able to deliver where we're already at and expand our growth rates. So one, simplification. two, industry-leading talent. three, specifically win in the U.S., 'cause if we do that well there, the rest of the world will follow. And then four, Evan's gonna come up and show you the AI and technology platform that's gonna drive a lot of this for us.
So Mark mentioned earlier, when I took this job about five years ago now, I told him that I think technology was changing the face of this industry, that I think we need to simplify the overall GroupM business, and we launched a program called Synergy. In March 2020, for the first time in GroupM's history, I brought the top 250 people together and said: "We are gonna get to a spot where we are one company, one product, and one culture, and technology is gonna force us to make this change." You can't have multiple operating companies with multiple different operating systems, multiple different planning tools, multiple different ways to go to market generally around the world. It's simply too complex, it's too expensive, and most importantly, we won't win.
Because the likes of Google and Facebook and the earlier transformation I just took you through, what's happening in our industry, requires us to think like a software company. It requires us to develop systems, thinking, processes, and technology that means we train all 44,000 people to say today is media 1.0. In six months, we're gonna be at media 1.5. In two years, we're gonna be at media 3.0, and that's gonna be powered through AI and programmatic, and all the different transformations that are happening in our industry. So we started this path back in 2020. We created a different operating model. We looked at, you know, the businesses that weren't gonna perform for us, and that were complicating our business, and divested those. We took our investment strategy, made that a single voice on a global basis.
We actually created a world-class people proposition to start recruiting engineers and technologists and programmatic specialists. We created the responsible media investment framework because what really matters is purpose in this space. When we look at what GroupM is and our scale and our size, we wanted to actually make sure that we made this industry a better place. So you saw us talk about things like sustainability, carbon neutrality, our data ethics, responsible use of AI, and taking leadership positions in that space. We created Choreograph, our technology and data company, and then we really looked at how we use AI from strategy all the way through to execution. One of the earliest uses of that was our copilot AI optimization system that we could apply against the DSPs that we created five years ago and have had in market since then.
We started moving towards offshore and automation, and we're expanding that, but knew that that would be a required piece. We created Nexus, which is really creating all the addressable and digital media groups into one organization. GroupM has, by far, the largest performance media organization in the world. That's because we went through the steps that we have here. We created EssenceMediacom, bringing those two brands together to further simplify the portfolio, and we've created a large amount of global practices, commerce being one of them, retail media being another one. So when we come into 2023 and 2024, and where we're at now, we're gonna further simplify the business, so continue with this plan.
We're gonna eliminate a lot of the mid and back office that's been supporting multiple finance systems, multiple P&Ls, and we're gonna reinvest a lot of that in the talent, data, and technology we need to continue to lead in this space. Now, I know you have a lot of questions about the specifics for the simplification plan that Joanne and Mark have talked about. So here's really how we lay it out for our employees. Our agencies continue to be very important for us. That's how we manage portfolios, it's how we manage conflict, as Mark talked about earlier. It's how we build category expertise. So we'll take our agencies, and they're gonna be focused on growing their clients' business. They will be the growth architects for their clients to say: How do we think about new products, new markets, new media types?
How do I build my marketing organization so that I'm ready to deliver for the future? Importantly, in that, they will not be in there talking about search strategies or programmatic or applications of AI, or picking the technology platforms in Turkey or any of the other countries around the world, because that is a single codified process at GroupM at this point. We will go to market the same way in every country and every market for all of our clients, and we have codified that to such an extent that we have written books and pads.
I was just sitting through a meeting here earlier, like, people literally have the books, we're actually still printing, sadly, but they're saying, "This is how we're gonna do this." So when you wanna learn marketing and advertising at GroupM, when you wanna run programmatic search or social, or think about the application of AI, this is it. Here's 200 steps, and we've written this with Google or Meta or any of the other partners in there to say that this is not only the way we do it, but it defines the industry and the right way to run media in the business. We'll get efficiencies from all of that, so there'll be cost savings within this, and Joanne will walk you through the numbers.
But naturally, when we go from doing things in a myriad of ways to a single way, we can reduce all those things that we don't need to do any longer. We'll also move to a single P&L in every market around the world. So instead of looking at big global P&Ls and local market P&Ls and all the infrastructure that comes with that, we'll report on a country-by-country basis, and we can optimize against specific countries in that sense. The second thing, I talk about talent. Over 90% of our employees say they love working at GroupM. It's an important number for us. We spend a lot of time talking about talent. We spend a lot of time developing our talent.
We spend a lot of money on it, and for us, that's really important that we keep that number as high as we can possibly get it. In the last four years, we've reduced churn, reduced churn by 32%. Again, really important for us. Not only do we wanna attract this great talent, we wanna hold on to it. We win tons of awards for DE&I, for the best places to work. Our campus strategy has worked really, really well. The ability to work with all these great creative partners and technology partners means that people feel proud about working at GroupM and WPP, and they wanna stay. We continue to create a global culture of innovation and creativity.
Now, it's not surprising, but I sit up here as, as the CEO of GroupM, and I think media sets the context for how we communicate with everybody around the world. Everybody's encouraged to think about creativity at this company. Everybody can be an AI expert at this company. Everybody believes that we are the creative transformation company and that we have a part to play in that. In the U.S., specifically, we've done a lot of things already in this space. We've refreshed our leadership. Just last week, I was in New York, announced Sharb Farjami, one of our most winningest CEOs in the U.S., that came out of Wavemaker as the new North American CEO. We've looked at more client-facing expertise. We've rehired a bunch of different client leaders in that space.
We have stronger technology deployment, heavier focus on commerce and retail media because it's been so important in that marketplace. We've looked at taking the scale in our media position. We're number two in that U.S., and how do we take that so that we can use that for advantage against our clients? We've simplified the go-to-market narrative. We've reduced the mid and back office, and we've actually integrated to a great degree with a lot of WPP so that we can have greater strength in that space. Now, I already know in passing that I've bumped into many of you, and you're like: "I wanna talk more about the U.S." So there's gonna be a Q&A for it. We can do that. But I wanna address 2023.
You know, despite we still grew at over 3% in 2023, and, you know, GroupM as a whole, Joanne will talk about, but did over 5% on the year, we had some losses that we shouldn't have had in 2023, and it is not a capability gap that we have in the U.S. When I walk through all those things we've been working on for years, we have the right technology story, we have the right data story, we have the right people, we have the right talent. We simply failed to get as simple as we need to do and tell that story every time at every opportunity that we had.
We had some clients who had high turnover on their side, so a lot of the pitches that you read about, we had a new CMO come in and wanted to relook at the relationship, and when we did that, we should have taken that opportunity to come in and tell the GroupM story that I'm telling you today, and that didn't happen in all cases. That's the honest truth.... So when you look at that, sometimes it's just we need to be stronger about making the change, going in, bringing in the technology story, talking about AI, forcing the change for clients that sometimes they themselves don't know they need to make. But it's not a capability problem, we just failed to tell the right story at the right time.
With that, I'm gonna turn it over to Evan Hanlon , who's gonna come up, our Global CEO of Choreograph, and I will come and close with you guys in a minute. Thank you.
So when I joined WPP in 2023, we were just figuring out how to run the first programmatic, programmatic ad on Facebook. Today, they compete for the number one slot on every single media plan from every single one of our clients. In that span, I've had the opportunity not only to lead technology teams, but also to be a global client leader and be on the front lines of facing down what that amount of change ultimately looks like every single day. And what it really comes down to is that our clients need a partner to help them navigate changing technology standards on a near-daily basis. That's what we help to deliver at Choreograph, and the way that we do that is by focusing on connecting our clients with the world's data.
That means using our own data as both a calibrator as well as a connector into these sort of vast wellsprings of data that all of these different platforms and media partners that Christian just walked you through ultimately look like. It's also a focus on a connection to activation and optimization. We are ruthless in our pursuit of connecting insights to media directly, because if we can't buy against it, ultimately it's worthless. And that connection also helps us create compound intelligence across all of our marketplace activities, which we ultimately are able to use to inform the wider WPP Open ecosystem, and connect not only to media, but to creative and production, as you've seen before. So the way that we are ultimately able to deliver that is across three key pillars within Choreograph.
The first is AI, the second is data, and the third is the platform experience that is in the hands of all 44,000 of our employees around the world. Now, AI for us has been something that we've been working on for quite some time. We focused first on that optimization space, where algorithms had governed how we bought and how we generated new value for our clients on a day-to-day basis. Now, the really sort of different piece, and the sort of supercharging component of this, is the brain work that you've seen coming out of WPP Open and Satalia before this. What that helps us do is take not only sort of very narrow and specific data sets around consumers, but also start to marry it against other disparate data set that are not so easily joined.
Instead of having to spend an enormous amount of time of structuring a database, adding new rows and columns, which can take sometimes months, we're able to use the power of the brains that we have available to us to actually smash this data together on a near real-time basis, to start to put into the hands of everybody developing insights, developing media plans, and ultimately buying and optimizing. Just one Audience Brain is able to manage not only 220 million different psychodemographic profiles that we own, but start to converge and merge all of the sales data that is available to us in the United States, for example, to start to answer one single fundamental question for all of our clients, which is: how do we grow? So let's talk about the data piece for a moment.
We have the largest and most connected data graph. This means that we not only own and hold our own customer database in the United States of 300 million profiles, with 10,000 unique attributes, as large and competitive as any in the market, but we're also able to further contextualize and enrich that with data that we generate from planning, optimization, and campaigns. Further contextualizing an incredibly sort of unique and specific edge that only we have from the trillions of additional impressions that we are able to run every single year. The other important piece of it is that that data that we own becomes a connection into the most important and deepest sources of data within platforms like Google.
Just this month, we announced that we were the first agency holding company, and the first of any of our clients, to integrate with Google's Audience Insights API, which gives us access to more than 1.5 billion real-time signals on a daily basis to enrich, and calibrate, and start to buy and activate within the Google ecosystem, and inform media plans beyond the walls of that platform itself. And speaking of platform, none of this works if we aren't able to get this out of a spreadsheet, out of a code base, and into the hands of the people who are doing the incredibly difficult, creative work of identifying where our clients' problems come from, and how they ultimately solve them, not only with media, but with creative and the joining of that together.
So I wanna take a moment to walk you through what that experience looks like, and what a day in the life of our teams are to really be able to accomplish that. Everything we do starts with our client data, right? It is their competitive edge, and it is the single thing that they own that no one else has access to. What we're gonna walk you through is a sort of real workflow of the platform for a sample technology client. In this case, what we're ultimately looking at is a database of their best customers that they've got a tremendous amount of knowledge, but some reticence about sharing with us, right? So we do this through a Clean Room, which lets us match this on an anonymous basis and process in near real time for ingestion first into our insights platform.
Now, once we've onboarded that data, we can start to dig in deep to understand, what do these best customers look like? We're starting to see now what segments and enthusiasms these people have within that, what products they should ultimately be focused on, on selling them, and looking at things like geographic distribution and predictive performance that we can ultimately accomplish with it. We also can start to contextualize and dimensionalize this with not only geographics, but lifestyles and media consumption, which is the bridge then into the sort of really sort of hard-working part of the process, which is planning.
This is where we start to take things like budget, like campaign flighting, and start to understand, how do we put this media to work, and what media partners do we really need to start thinking about, placing our hard-working dollars against? It also helps us understand things like tasks. Is this about branding or performance? Should we be thinking about social or television more? And starting to look at what the predictive reach curves and what the ROI ultimately looks like. Importantly, we can start to input different sort of real-world factors to give us lots of different scenarios. From there, we move into what is arguably the most important piece of what we do, which is optimization.
You've seen a lot from both the creative studio and the production studio that helps us start to break down the single biggest bottleneck in media optimization, which is creative availability. You're seeing real-time assembly of lots of different creative variations, in the thousands, that we are then automatically determining or matching to combinations of audiences, channels, and platforms, and using insights generated from that, to swap that out in real time. This is all informed by data from our longest-running AI program, which is focused on media optimization, which for the past seven years, has gone from being able to optimize just one platform to many different platforms, to now being able to think and consider lots of different AI algorithms across things like Google, Facebook, The Trade Desk, and beyond, uniting a media plan into sort of one big optimizable campaign.
A lot of this is really focused on data in and what that sort of flow works coming out of it. But the learnings that we achieve by standardizing, normalizing, and combining all of this performance data that we're able to collect from individual platforms is really what gives us that competitive edge when it comes to a view on the marketplace more broadly. Not only does this data allow our clients, for example, to see how their media is performing and where to make large strategic decisions about where they should be spending, but it also allows us to aggregate the broader marketplace activity to understand what trends ultimately look like within the market more broadly.
This is what we mean when we talk about the power of the data that we generate from the scale of our media investment, and this is what Choreograph is focused on in terms of not only powering what our media planners are able to do, but also what our creative partners across WPP do as well.
Thanks, Evan. You get a sense of the transformation that GroupM's gone through. When I talk about the shift into technology-enabled services and what that looks like, that's the platforms, those are the types of people that we're bringing into this company. That's the engineering group that we're building. I wanna close with just three points for you guys. One, the scale of GroupM. Number one in Europe, number one in APAC, number two in the U.S., a clear plan to be number one in every market that we are around the world. Incredible success across Europe right now. Great wins across the board there. The same in APAC. We had our share of challenges in the U.S., but we also won, still continued our track record of growth there. We've got a simple operating model. It's been in progress for five years. This is not something new.
There's no big bump that's gonna hit along the road for that. This is something that I told our people in March of 2020 we were gonna move to, and we've been moving very systematically and strategically to not disrupt the business. We've grown every year through that time period and continued to lead across our, our industry. And then finally, we have a vision for this industry. We have an obligation to lead, we have a responsibility to lead, and we will continue to do so. We love advertising. We love creativity. I'm on record a ton, talking about the fact that I wanna make advertising earn its place in people's lives, be less annoying, less pollutive, and we can do that through the power of WPP and the company that we've built here. Now, we have a break. So, 10 minutes?
I think we should.
Question?
Call it a stretch. Five minutes.
Stretch. Now you have a stretch.
We'll get back on time, so only leave the room if you have to. Otherwise, stand up, chat, grab something, and we'll start again in five minutes, okay? Thanks, Christian.
Okay, welcome back, and good afternoon, everyone. I hope you've enjoyed the day so far. It's really been a great opportunity for us to dive a little bit deeper into some of our talent and capabilities, and really, what remains for me to do is to explain how we're going to harness all of that to deliver our financial objectives. First, I wanted to spend a little bit of time on our near-term performance. As we shared in our release this morning, we expect our full year results for 2023 to be in line with the guidance that we shared during our Q3 trading update in October. Our organic net sales grew 0.9% in 2023, and we expect a reported operating margin to be 14.8%.
Now, that translates to 15% on a constant currency basis, which is equivalent to an underlying margin improvement of 20 basis points year-on-year. We also expect our free cash flow to be in line with consensus expectations at around GBP 600 million. Now, well, while our top line reflects a more challenging year than we had anticipated this time 12 months ago, we are pleased that the disciplined cost actions that we took this year enabled us to grow our margin at the same time as continuing to invest in the business. Turning to 2024, we are forecasting organic revenue less pass-through costs of 0-1%, with headline operating margin improving by 20-40 basis points. We also expect some continued upward pressure on our tax and finance costs.
Now, our top-line guidance reflects the headwind from 2023 client losses, which will impact really our growth from Q1 onwards, and also the continuing uncertain macro environment. It is our assumption that client spending in the first half of 2024 will be similar to the trends that we saw in the second half of 2023. And with regards to phasing across the year, Q1 is our toughest comp and Q3 is our easiest comp, and so we'd expect organic growth to be weighted towards the second half. Now, we will provide further detail, of course, on both our 2023 performance and our 2024 outlook at our full set of results on the 22nd of February.
Before turning to our plans for the next three to five years, I wanted to share some of my reflections since joining the business last year, and also some of my priorities. To start, I'm really delighted to be part of this team. What's been really apparent to me since joining is just the relentless focus on the excellence with which everyone, from our client leads, to our creative talent, to our data and tech experts, really creates value for our clients. Now, the team have brought some of this to life for you today, and you've heard also from some of our partners and clients. The value that we create is really undisputed, and I think we have a real opportunity to turn that into even greater returns for our business and for our stakeholders.
We have a powerful combination of smart, highly motivated and diverse individuals, together with a culture where creativity and innovation really thrives. And that is going to be really critical for us as we unleash the opportunities that generative AI presents. A final reflection is just how much has been achieved culturally, operationally, and in transforming how and what we do. Now, we all know that transformation and change is not easy, but it is necessary, and I believe that the foundations that we have laid in the past three to five years will enable us to achieve even more in the next three to five years. As part of that, we will seek to execute more efficiently, to drive better productivity and returns from our business. We are ambitious to do so, and we are confident that we can.
That brings me on to my priorities, which really will follow what I will talk to you about today. The first one is driving more profitable growth. The second is unlocking operating efficiencies. We also want to generate and focus on, on our cash generation and execute all of that within a disciplined capital allocation framework. I'm very excited to be part of this team and of what we are going to achieve together. Now just touching briefly on our financial journey to here. We set out in 2018 and 2020 to accelerate our growth. We achieved that with a CAGR of 2.6% in the four years since 2019, and that was really driven by our, an improved creativity offer and continued growth in media.
That period includes a challenging 2023, during which our relatively higher exposure to the tech, to the tech sector resulted in a drag on our top-line performance. In the same period, we've grown our margin 40 basis points to 14.8%. Now, that does remain lower than our historic margin in the years prior to 2019, and it partly reflects the past underinvestment in our offer and in some of our back office, which we have focused on addressing in recent years. Finally, our cash generation has been mixed across the period. Between 2019 and 2021, we delivered a strong cash performance, benefiting from significant trade working capital inflows. In 2022, the unwinding of some of that working capital and also higher cash restructuring costs weighed on our cash generation. We expect an improved performance in 2023.
Moving on to our transformation. At our CMD in 2020, we set out a plan to deliver GBP 600 million of gross savings versus our 2019 cost base. We are pleased with the progress that we have made, and at the end of 2023, we had delivered around GBP 470 million of gross savings. Now, savings have come from three buckets. Firstly, our operating model, where we've delivered around GBP 150 million of savings from a simpler WPP and lower travel costs. A further GBP 236 million has been delivered from our category-led and global approach to procurement, and also our campus strategy, which as well as realizing significant cost savings for us, has also culturally brought our agencies together.
Our final area of savings amounting to approximately GBP 87 million is from our back office transformation, and that's really made up of two key pillars: our enterprise IT transformation and our finance transformation, which has been centered around the consolidation of our ERPs and also our finance operating model. We've made good progress on our enterprise IT roadmap, including our migration to the cloud, enhancing our cybersecurity, and really investing in our digital workplace. Gross savings have been delivered from offshoring, with approximately 25% of our IT colleagues today located in IT centers of excellence and from our cloud migration. We've also made progress on our ERP consolidation. Now, given where we started and the fragmented nature of our organization, this is a complex program, and it is taking longer than we had originally anticipated.
We are encouraged by the business benefits that we are starting to realize from the deployment of Workday in North America. These include efficiencies from improved and more systemized staff planning and utilization, and we've also seen improved working capital management as a result of better and more timely data, integrated systems, and standardized processes. We've evolved our ERP roadmap to reflect some of the learnings from the past few years, and we now expect the bulk of our ERP consolidation to be completed by 2026, with restructuring costs reducing accordingly. Alongside our ERP consolidation, we have continued to build out our finance shared services, and around 25% of our finance colleagues are now based in the shared service center. Just to wrap up on our journey to here, I've included a margin bridge from 2019 - 2023 expected headline margin.
Now, the first three blocks reflect the gross savings I have just shared, and some of these savings have been reinvested back into our business with investment in our talent, most notably in our creative and our capabilities talent, and in rebuilding our incentive pool from 2.7% in 2019 to 3.2% of net sales in 2023. We have also invested across both our client tech, including WPP Open, AI, and Choreograph, which of course you've all seen today, and in our enterprise IT to address some of that historic underinvestment. Now moving on to a medium-term financial framework, which really built around four key pillars. The first is accelerating our organic growth through scale and through innovation, and alongside that, we will seek to deliver this growth more profitably from simplification and efficiencies.
We are also setting out to deliver consistent and stronger cash generation, and finally, we will execute within a disciplined capital allocation framework. Now, we expect the output of all of that in the medium term to be at least 3%+ organic growth, 16%-17% headline operating margin, and at least 85% operating cash conversion. We will maintain our average net debt to EBITDA target ratio at 1.5-1.75x. Starting with our growth plans. In the four years to 2023, our compound annual growth rate was 2.6%. We are increasing our target growth rate across the medium term to at least 3%.
We are guiding for growth from our integrated creative agencies to accelerate from 0.5% CAGR over the last four years to at least 2% across the medium term. This reflects what we expect to be a more challenging year in 2024, for the reasons I've already outlined, with growth accelerating in the outer years of the forecast period. And for media, which has grown at 5.3% over the last four years, we expect continued growth at that level or better. And finally, across our PR and our specialist agencies, we are guiding to growth of at least 4% and at least 2% respectively, which is consistent with the historic levels we've delivered.
In today's presentation, you've really seen the strength of our creative agency capabilities across brand, across customer experience, commerce, and production, and how all of that translates into creating significant value for our clients. You've seen how the powerful combination of those capabilities are underpinned by our world-class leading creative talent and amplified by technology and AI tools, all delivered through WPP Open. With three differentiated creative agency brands, we have a simpler go-to-market proposition that offers clients scaled end-to-end solutions. Alongside this, our addressable market for both our creative and production agencies continues to grow, and there's significant headroom within our, across our top 50 clients. If we look across our creative agencies, VML will benefit from revenue synergies, Ogilvy has strong momentum from new business, and AKQA's strong reputation across customer experience and innovation is more relevant than ever.
In production, Hogarth's strong track record of growth will benefit further from its scaled AI-enabled offer, and all of that strongly underpins our target compound annual growth of above 2% over the medium term. Moving on to GroupM and our media proposition. GroupM has a strong track record benefiting from its global scale and its powerful and proprietary media platform. Scale is critical in media, and combining that with our industry-leading talent, data capabilities, and technology augmented by AI means that we are confident GroupM can offer all of our clients the best return on their marketing investment across a fast, ever-changing, and a more complex landscape. GroupM's simpler structure and its unified global platform will enhance our go-to-market proposition and help drive stronger new business conversion.
Recent global wins at PayPal and Alliance, and our win with Nestlé in Europe, all contribute to delivering on our long-term ambition to lead in every major media market. We also see opportunities to accelerate growth across commerce, influencer channels, and consulting. As we bring both our media and creative together, we are really excited by the opportunity to capture growth from both existing and new clients. More and more, these clients are seeking integrated solutions and scaled solutions, which is something we're already delivering globally for some of the world's largest brands. Finally, that takes me to PR. Companies are facing an increasingly complex media landscape, in which managing corporate reputation across varied groups of stakeholders has become more difficult and more complex. This has increased the value that our PR agencies are offering to their clients.
Burson brings together BCW and Hill & Knowlton to create a top three global PR company, with leading positions in critical markets and across global practices, equipping it to better serve its clients. FGS Global, which itself was created from the consolidation of several specialist financial PR agencies, will continue to build on its strong growth as it further leverages its global leadership. We are confident that our PR agencies can deliver growth approaching mid-single digits over the medium term, benefiting from enhanced scale, client demand, and access to the world's largest brands through WPP. Further underpinning this growth is our unrivaled geographic footprint, with strong reputation or representation across the largest developing and developing markets. In the U.S., cuts in client tech spend and weaker new business performance, has impacted our growth.
The actions we are taking at VML and at GroupM will strengthen the position of those agencies in the U.S., not least through greater scale and consolidated capabilities. Ogilvy has built strong momentum in the U.S. over the past 12-18 months, with its investment in creative talent paying off with strong new business wins. If we turn to China, it's one of the largest and the most digital advertising markets in the world, and we work with both international and local clients in that market. We expect the drag on top-line growth in recent years to stabilize in the near term and accelerate growth in that market over the medium term. We expect continued strong growth across the U.K. and India, and we have a very strong footprint as well in other fast-growing markets, including Brazil, which is a top 10 market for us.
As well as our diversified geographic footprint, we have a strong and attractive representation across client sectors, which offer us further growth opportunities. Our largest sector, CPG, has seen strong growth benefiting from CPG clients' commitments to investing behind their brands, and we expect that to continue. We consider our strength in, and our exposure to, the technology sector to be an asset for us. Over the medium term, we expect to see a rebound in spend from our tech clients, driven by their investment in AI products and services. And our third largest sector, health, will see an impact in the near term from the loss of the Pfizer creative business. But we see an opportunity to expand our presence across this sector, and we'll continue to leverage key assets, including CMI Media, which is partner to many of the world's largest pharma and healthcare companies.
We will also seek to take more of our fair share in sectors where we have a smaller footprint today, and that includes financial services and telecoms, where we have won large new clients in the past year. Now moving on to share how we're gonna deliver that growth more profitably. We believe that over the medium term, our business can and should operate with a margin range of 16%-17%. The strategic actions we're taking to deliver structural cost savings will underpin margin expansion, and we have identified further efficiency opportunities, which we will use to continue to invest in our business and support delivery of our medium-term margin target of 16%-17%. We expect accelerated margin progression in 2024 and 2025, with further improvements from 2026, and I will share how we plan to achieve this.
Now, there are two key areas of savings. The first is structural savings from the strategic initiatives we have announced. The mergers of VMLY&R and Wunderman Thompson to create VML, and of BCW and Hill & Knowlton to create Burson, and of course, the simplification of GroupM. The second bucket of savings is from efficiencies across both our back office and our front office commercial delivery. Now, let me dig a little bit deeper into how we will deliver the structural savings. VML and GroupM plans, as you've heard today, are already well underway and are being executed. For VML, we expect around GBP 50 million of savings, delivered from realizing cost synergies across global and regional headquarters, finance and HR simplification, leveraging global production and tech hubs, and other areas, including real estate.
GroupM savings will come from the removal of duplication overhead across our three media agencies and GroupM. This will enable us to consolidate our back office teams and markets, remove duplication where it exists in the front office, and unlock efficiencies from a common tech platform and product and data management. We expect the simplification of GroupM to deliver annualized net savings of around GBP 60 million. Now, Burson's plans are at an earlier stage, but we are confident that we can deliver cost savings from combining BCW and Hill, Hill & Knowlton's back office infrastructure in each market, and also streamlining the front office, at the same time as scaling and enhancing our global practices. In total, we're estimating net savings of around GBP 125 million from all of these actions, with 40%-50% of this realized in 2024.
It is our intention that the majority of cash restructuring costs associated with these initiatives will be incurred in 2024, and we estimate the 2024 charge from those to be around GBP 125 million. Turning to the back office, now the structural initiatives we are taking will reduce the cost of our back office across VML, across GroupM, and BCW. But we see further opportunities for efficiencies across our finance and our IT functions in particular. These will come from continued progress against our enterprise IT roadmap, and we will also deliver benefits from our workforce optimization across finance and IT to ensure that we have the right people in the right place, doing the right activities. And this is all supported by a continuous improvement program, which is focused on process optimization, automation, and further systems integration.
AI tools will augment and accelerate our efforts, and we are already using AI in parts of our back office today, including automation of coding across our cybersecurity operations and adoption of tools, including Microsoft Copilot and Power Platform, to really improve our productivity. In addition to finance and IT, we will deliver further savings from our category-led approach to procurement, and also from our campus consolidation. We are now targeting 47 campuses by 2025, which is a lower level than our original target and really reflects our adaptation to the evolving needs of the business. Overall, we are targeting at least GBP 75 million of efficiency savings from our back office over the medium term. Moving on now to our front office commercial delivery, there's an opportunity for us to execute the great work that we do even more effectively.
Now, this will partly be enabled by the investment we've already made in better systems and better tools, in our data, and from the application of AI. With WPP Open and AI, we are already benefiting from faster ideation, reduction in time spent on non-revenue generating tasks, and significantly faster deployment times. We will also deliver efficiencies from scaling up our global delivery centers, our GDCs, as we call them, which today are home to approximately 10,000 of our employees. The GDCs support delivery across CX, technology, media, commerce, content, and production, and we see an opportunity to scale these further in the next three years, increasing the number of offshore colleagues by at least 50%. We are prioritizing moving up the value chain in our production capabilities, scaling our content capabilities, and building on our already strong technology and engineering offshore talent.
We will also continue to optimize our resource utilization, reducing non-billable time, and benefiting from systemized management of our freelancers. I spoke earlier about some of the benefits that we are seeing from Workday, and that is giving us the foundations to bring AI enablement to our resource management and our staff planning. This is something which Satalia is working in partnership with VML to unlock. Overall, we are targeting at least GBP 150 million of efficiency savings over the medium term. Bringing all of that together, we expect our margin to grow 20-40 basis points in 2024, and that's benefiting from part realization of the structural cost savings, which we anticipate will be partially offset by an increased incentive cost as a percent of net sales in 2024.
Now, beyond 2024, we expect to realize further structural and efficiency savings and greater operating leverage as our top line grows towards our medium-term target. Some of these savings will support continued investment in our business, prioritizing our industry-leading capabilities, including AI, Choreograph, and WPP Open. Our plans include annual cash investment of around GBP 250 million in proprietary technology to support our AI and data strategy. Taking all of this together, we are confident we can both deliver our medium-term margin target of 16%-17% and invest in our business to accelerate our growth. Now moving on to our cash generation. The fundamentals of our business mean that we can deliver consistent and stronger cash generation, and we are introducing a target for 85% or higher headline... or conversion of headline, operating profit into operating cash flow.
Using this metric will enable us to set specific targets for each of our agency businesses and ensure that we have the right focus on this. We're introducing a cash element to the profit metric on which our annual incentives are based from this year onwards. Free cash flow, which includes cash, interest, and tax, remains an important metric for us, and we'll continue to seek to drive improvement in that metric over time. We've included a slide in the appendix, which provides greater detail on each of these metrics. Now, across both operating and free cash flow, we expect to see an improved year-on-year performance in 2023, but there is more to go for here.
Improvement in our cash generation will be supported by more profitable growth and annual CapEx normalizing to around GBP 200 million from 2025, which compares to an average of GBP 280 million between 2019 and 2023. We will, of course, continue to focus on tight working capital management and reducing our restructuring costs, both of which I'll talk more to in a moment. Partially offsetting some of these benefits for, for free cash flow will be expected higher cash interest and higher cash tax charges. Digging a bit deeper into working capital. Now, since 2019, we have delivered, in aggregate, an improvement in working capital of over GBP 1 billion, all driven by trade working capital, with some offset from outflows across our non-trade working capital.
These fluctuations in non-trade working capital have been driven by variability in our annual incentives, our campus funding structures, increases in prepaid contracts, and taxes relating to our media billings. Our working capital management is a key focus area for us, and for 2024, we are targeting flat total working capital. Finally, our cash restructuring costs have been elevated in recent years, driven by costs associated with our transformation. In 2024, we expect restructuring costs to be around GBP 285 million, reflecting costs associated with the VML and Burson mergers and GroupM's simplification. Other cash restructuring costs relating to our ERP and our IT programs, as well as property-related costs, are expected to reduce from around GBP 190 million in 2023 to around GBP 160 million.
From 2025, we expect restructuring costs to reduce significantly to less than GBP 30 million in 2027. Those GBP 30 million, of course, will relate to legacy leases, which we have impaired, and they will reduce as these properties are either subleased or the lease ends. Finally, that takes us to our capital allocation framework. We will continue to adopt a consistent and a disciplined approach to our capital allocation. Our first priority is continuing to invest to drive organic growth in our business, particularly in the areas that we have shared today: technology, AI, and in our talent. We will also follow a progressive dividend policy, which targets a 40% payout of headline EPS.
To complement our organic investment, we will invest in targeted M&A opportunities that strengthen and accelerate our capabilities in high-growth areas, and I'll come back to that in a moment. And finally, where we have excess cash, we will return it to shareholders, as we have demonstrated in recent years. We are focused on maintaining our investment-grade balance sheet and a target leverage ratio of 1.5-1.75x our average net debt, which excludes lease liabilities to headline EBITDA. As expected, we'll have finished 2023 slightly above the upper end of that range, but we do expect to move back within the range in 2024. And finally, in capital allocation, I just wanted to spend a little time on our approach to M&A and our track record.
Our industry is dynamic, and it is constantly evolving, and we believe this creates opportunities to add value through targeted M&A. When we look back over the last four years, we are pleased with the impact that our M&A activity has had on our business. We have bought many great businesses that have enhanced our existing capabilities. And we've been able to fund that M&A investment from recycling a small proportion of the proceeds that we've realized from our many disposals since 2018. Acquisitions made between 2020 and 2023 are expected to be accretive to growth and margin in 2024, and they're on track to exceed our cost of capital and add shareholder value over time.
We focus our M&A on businesses that build on and accelerate our existing capabilities and therefore our ability to grow, to retain, and also to win new business, with Satalia the obvious name to call out here as a particularly successful acquisition for us. And so to wrap up, we are very confident in our medium-term financial plan and in our ability to deliver, to deliver strong and sustained shareholder value. We have a very strong foundation to accelerate growth and returns with an unrivaled global reach and scale. Today, we have the number one media agency globally, the number one creative agency globally, the number one production agency globally, and leading specialist PR agencies. We operate in an attractive and a growing addressable market, and we have deep client relationships across diverse and growing sectors.
As we've brought to life for you today, hopefully, we've been investing in our AI and our technology platform, and we've been deploying this extensively across our business. We are very excited by the opportunity this presents, both in terms of growth and in terms of productivity. We have a strong financial foundation, which we are confident that we can continue to strengthen. And finally, we attract and we retain world-leading talent, talent that is ambitious for the future and focused on creating value for all of our stakeholders. And so with that, we will hear from Laurent, our Chief Marketing Officer, who will be joined by a very special guest.
Look!
Good afternoon. I'm Laurent Ezekiel. At the end of 2021, actually on the 8th of November at 2:00 P.M., I remember it well, WPP was appointed global network marketing partner by The Coca-Cola Company in what remains the biggest ever industry pitch. I am still recovering. As a result, we created WPP Open X, a bespoke, ambitious agency model that was integrated at its core and unprecedented in scale. In fact, our work spans 200 brands across 195 markets. We have over 5,000 people from the agencies that you've heard from today as part of the team. So I'm delighted to welcome to the stage, my friend, my partner, who built this with us, Manolo Arroyo. Please put your hands together for Manolo. Thank you. And I got you to clap.
I know.
I knew it. I tried. Thanks for joining us, Manolo.
Thank you.
We're here to talk about being ambitious for the future. You made an ambitious decision a couple of years ago. Why WPP?
So thank you, Laurent and Mark, for inviting me over to share our amazing journey together and why we selected WPP. Brief context, we were coming from a place where we had more than 7,000 agencies working in 212 countries around the world, and only 189 registered in the United Nations, for those of you that are curious. We realized very quickly that the name of the game was about integration, and it was about bringing together something that the whole industry has been trying for more than 20 years, but hasn't been able to do that, which was the power of connecting creativity with media, with experiences, with innovation, underpinned by the power of data and tech.
It was very clearly through that capability assessment process, not a pitch, at only 170 video conferences in the middle of a pandemic, that's the real number. We very clearly understood that WPP was at a whole different level, and it was not only because of its scale, and it was not only because of their ability to integrate those complex disciplines. I would add two components that make a big difference for Coca-Cola to make that decision. One was the notion of open, and it's the fact that you've got to realize that ideas come and should come from anywhere. WPP was by far the most open network to bring together not only those capabilities, but others that might be in a different place.
And that's where the partnerships with OpenAI, NVIDIA, Microsoft, Adobe, play a significant role, and it was very important for us. I think ultimately, in this whole world of marketing, you talk about the importance of brand perception, and it might surprise you, but after more than 30 years in, in the Coca-Cola system, I don't, I don't believe anymore that much... We don't believe it anymore, anymore in the power of perceptions. We believe in the power of behavior. And I think WPP, and Mark, particularly, better than anyone else in the industry, understood that we were driving a transformation driven by data and by facts, and that metrics matter. And we decided to move from a perception metric to a behavioral metric driven by number of humans, number of people drinking our products, but really drinking, not saying something and doing something different.
I think what Mark said at some point, "Your target, your objective, your KPI, your metric, it will be my metric." That really swing significantly the decision.
So if we pick up on the metric, which is a big part of your marketing transformation, Manolo, is to drive that metric, right? Talk a little bit about the last two years and how we've accelerated your transformation as WPP.
The results for us are unquestionable. If you read our latest company financial statements and reports in the second or third quarter of the year, very close to the full year results soon, marketing is again the driving force, the engine of the growth for Coca-Cola. And through the partnership with WPP, their support has been instrumental to help us move that metric that we know it drives our top line. In CPG, two-thirds of the value creation comes through top line, one-third through the cost of structure. So ensuring that that top line is always there, it makes a big difference. We've seen that in an accelerated way since we started the partnership. We were, for years, struggling to move the needle. We're growing through more frequency and pricing, but not necessarily increasing our consumer base around the world.
Might be a coincidence. I don't believe in coincidence or luck, but 2022 was a great year. We obviously don't disclose those numbers for confidentiality, but we did increase significantly our consumer base in 2022, and that has increased even over and above in 2023. But I think more importantly, one of the biggest challenges for a client is that notion of integration. On one side, we want, I want, in Coca-Cola, the benefit of the wonderful 200 agencies and 12 different partners, networks within WPP. But I wanna—I, I don't wanna deal with bringing all of that, all of that together. That's the role where Laurent and the Open X model is showing for us that underpinned by technology and data, you can accelerate on real time the delivery and the integration of those critical capabilities.
I think that, for us, is what is really showing a very different way of working. It's a peer-to-peer marketing network model, where you see a symmetrical, basically, replica of how our network and the WPP network works. All of this comes to life through something we call Studio X. Studio X is, in my own words, the Coca-Cola marketing factory. It used to be a factory that was not a physical factory, it was a process that was about TV-centric ads development. Today, it is a physical place that is set up in a way, in a synergistic manner, with our own geographical distribution in the company, symmetrical. And in a co-located physical way, you have there all the integrated capabilities that will allow you to connect to culture on real time and bring in those capabilities that are more representative of modern marketing.
Consumers today are looking for something different, and what they're looking for is not any more TV ads, as you know. It requires a whole set of capabilities around social, influencers, experiences, live events, all underpinned by data and AI. And that is a reality for us, with close to 2,000 people on those Studio X today working for Coca-Cola.
I just wanna go back and confirm it, the results are not a coincidence. It's a lot of hard work. Bernardo, if I could take it to the industry at large a bit, so broaden from our partnership. It's been a long, it's been a two-year journey, it's been a lot of work, it's been bumps along the road, of course. What would you say to companies considering a similar approach?
I think we're just... I mean, repeating the obvious, the consumer, particularly Gen Z, the young consumer, is very, very different. The old marketing solutions are not relevant any longer. The name of the game is about integration, and the name of the game is about simplicity. So my question to any other client would be, the question I don't think it's: why would you? But actually, why wouldn't you go for a model like this? I can't think of a different model. I'm convinced this is the model of the future of marketing, not only for Coca-Cola, but definitely for the rest of the CPG industry at large.
Yeah. I spoke to our leadership the other day, and I said the same: "How could you not, at this scale, do this?" It's interesting when you look at it like that. We spoke this morning, and earlier today, Rob spoke about some of the work, and the agencies have covered their work. At the end of the day, this comes together in the work that we do, that our consumers see, that drive the results that you mentioned. So I'm gonna ask you to talk about your favorite work in the last year, a couple of pieces of work that you've enjoyed, and we discussed it a little bit beforehand, but tell us about that, the work itself.
I think there's a lot of great work, by the way, not only acknowledging by myself, but everyone at the Coca-Cola Company, our bottling partners around the world, really talking about it, the difference that marketing and the partnership with WPP is making for our whole enterprise. But there are, I would say two that I wanna share with the audience. One is our Christmas campaign. As you can imagine, after decades, and decades, and decades of Santas and polar bears, you say, "Are you sure that doing the same is gonna drive different results? You've gotta do really something very different." And I think what WPP developed for us was a very important platform. I think starting with, with the obvious, the world today is complex.
There's a lot of stuff going on, and, a promise that is as simple as, "The world today needs more Santas," I found it an incredibly smart and creative way to invite to reflection. We then brought this to life through a series of connection points, starting on digital. A digital engagement, leveraging influencers, developing content through AI, through the partnership with WPP. They create Real Magic platform, which enable consumers around the world to create, to co-create with us their own interpretation about what a Christmas card should be about. Obviously, first-party data is behind all of this, and I think we saw the power, with just at the beginning of what AI can do, and transform the whole profession. A lot of other work done with content, particularly on Amazon Prime.
A key component of the whole program for us is: how do we bring this to life on the streets? In the past, we used to do a lot of Christmas caravans, with trucks taking over various cities in different parts of the world. That continued this year, but the way we leveraged social and influencers was very, very unique. I wanna call your attention on one that I'm hoping has to stay in this room. We did it in Japan. We've got our first caravan with drones, 1,250 drones in the air, and you could follow the storytelling from the air, watching to the air, with 25,000 Japanese in eight different cities. Love to see that happening in the top 50 cities in the world, in the planet, the same day, same hour, ideally next year.
The feedback we're getting from this campaign is just phenomenal because it didn't start on a TV ad. Yes, we got a video, but it's almost like it feels like it's actually the last nice cherry in the Coke cherry in the cake, as opposed to the starting point of the whole, of the whole campaign. A very different look and feel of Christmas for Coke. The second one I wanna talk about is a platform that we call we name Coca-Cola is Cooking. Now, Coke is Cooking, which is about the intersection for Coca-Cola to drive growth. As a quick context, associating Coca-Cola to meals, it's a clear winner.
It's an occasion in which every human normally drinks something, and the taste marriage between Coke and a lot of food goes particularly well, depending, obviously, on the food. We've been doing this for years, more in some parts of the world than others. We see meals as a consumption occasion, but it's also true that, at the same time, it's a huge passion for a lot of people. Then we brought in the power of music, arguably the number one passion point for consumers around the world, particularly Gen Z. You have an intersection between consumption occasions, passion points like cooking, fooding, music, all coming together. What this is about is a social influencer-led program, where you bring hundreds of thousands of people into street festivals.
So those of you that, like I, have been a few times in the Oktoberfest in Munich, think about a similar type of approach, but 200,000-400,000 people in the streets of India, many cities in Africa, Asia. Around 35 cities across the world last year. For 2024, we're gonna go more than 60 at this point, and we're connecting and we're bringing into the streets, thousands of consumers, all our customers, all restaurants, fast food, home food delivery partners, all under one ecosystem that brings a party celebration, that connects that ecosystem of data and digital influences with experiencing what we sell, which is a soft drink on the streets. Also yielding phenomenal results. Some cities, before and after the event, triple-digit growth on brand Coca-Cola. It's not a new product. It's a 140-year-old brand.
Triple-digit, double, triple-digit in pretty much every city that we've been activating this program across the world.
Thank you. Thanks, and thank you, Manolo, for joining us today, for sharing the story. Just in closing-
It's an amazing partnership, just to, on a human level, I wanna- I may make you blush. There's a, there's a lot that we put in PowerPoint. There were many meetings during the pitch. A couple of ingredients you can't put on PowerPoint, and one is ambition and leadership, and Manolo here has that in spades. So it's a great partnership. Thanks for joining us today.
Thank you.
Thank you.
Thank you.
All right. Manolo, thanks. Thanks so much. And, go Joanne there. And, we really appreciate you coming over for this. So I think we've got about, 40 minutes questions. I think if I could ask you to kind of, I think, two questions each, not three, like the calls. And, we start sort of- we'll start at the front and work back. And maybe, I think we'd- we'll deal with, if we can, 20... It's not gonna stop you, I know. But if we can, we'll deal with 2023 and 2024 as much as we can on the call in three or four weeks' time when we have everything and you have all of the detail. But, I'm sure we'll, deal with that. So why don't we start? Tom, you, question now?
Yeah, thank you.
Just say who you are and where you're from-
Yeah, I will do.
... for people listening. Yeah.
Tom from Citi. Thank you very much for taking the question and for the whole afternoon. It's been great. Right at the beginning of the presentation, Mark, you talked about the sort of the internet age moving into the AI age, and I suppose one of the striking things for WPP is the internet age didn't really herald a massive change in the service model. I'm interested whether you can offer some perspectives on whether the shift to an AI model does mean what that means in terms of outcome-based revenue and sort of scalability.
Yeah
... for the longer term.
Yeah.
And then, maybe one for Joanne. A bit of a cheeky one, I suppose.
Yeah.
You know, you talked about the growth rates for the different components of the business. Creativity is obviously central to what you do, so where that's 2%+ growth and just accept that that's what you're gonna do. The specialist agencies, can you talk about what they bring to the broader group, and that justifies keeping them in the portfolio-
Mm-hmm.
with that slower growth rate?
I think actually the digital revenue changed more than you think. I might say, actually, our media business has adapted very well, maybe because they managed the budget. They did TV, they did digital, and they were good and invested and did that well. I think our creative agencies struggled a bit, and one of the things we had to do is integrate them, and that integration, I think, gave them broader skills and enabled them to get back to growth. Actually, we're looking at it ahead of this meeting. We think around 25-26% of our business is non-FTE related today, if you look across our media business, our production business, and more broadly. We have made quite a lot of progress moving away from fee-based movements.
And I'd say that the decision we've made to further simplify the organization was in part driven by the decision to have a simpler business dealing with AI. You know, we didn't want both Hill & Knowlton and BCW were great businesses, but I think we kind of realized we didn't want two groups of people to solve the AI problem themselves. I think part of this, the rationalization that we've gone through, is a little bit about equipping the company organizationally to deal with AI a little bit more. Now, you're right, it's going to require further changes. But I think, you know, if you look at WPP, half the jobs didn't exist 20 years ago. We didn't have search engine managers, social media managers, influencers, programmatic media specialists, e-commerce experts.
There's, I think, been a tremendous amount of change, and I think we're well equipped, as we talked about, to manage that change. A bit about-
Yeah, so just on specialist agencies, the historic CAGR that we shared has been impacted a little bit by 2023, where some of our specialist agencies had a particularly tough year, and a lot of those agencies are focused really on some of the more project-related work. Icon M obile, for example, is also, you know, focused on a lot of the auto and the tech sector, and that was impacted this year. So the historical growth is a little bit impacted by that. But in terms of what we see, the specialty agencies, some fantastic businesses in there. I referred to one today, CMI Media, sits within specialty agencies, and it's growing at double digits and is a great business.
And they're overseeing a portfolio of businesses that we really grow, and then the intention would be to integrate those into one of our agencies, either the media agency, GroupM, or into one of our creative agencies or our PR agencies, and that would be the intent, that they wouldn't stay there. We're also looking across our specialty agencies as well, you know, just to understand, as we always do, whether or not, you know, there's opportunities in there to perhaps realize some value from some of the assets that we hold within specialty agencies. But they're less than 10% of our overall revenue today.
Next question, now we go to Lisa Yang .
Thank you very much for the presentation, the opportunity. My first question is a bit of a follow-up to Tom's. I'm just wondering, you know, that you have shown a lot of great use cases of GenAI today. You talked a lot about, you know, efficiencies that it brings. So I'm just wondering, like, how do you see the adoption of GenAI impacting your pricing, the volume of work over time? Are you able to basically keep some of the efficiency gains to yourself, or do you think over time you have to pass that on to your customers? So basically, how would you quantify the margin benefit from basically use of GenAI over time?
And the second question is really to the GBP 250 million annual investments in GenAI. So, could you maybe just help us contextualize, like, how does that compare to what you've been spending in recent years? How much of that is incremental-
Yeah
... and maybe break it down between OpEx, CapEx, you know, technologies-
Yeah
... versus content, versus the people? Thank you.
Okay. So, I'll take and start the first question, and Joanne can finish it and then talk about the investment. I think, you know, AI is gonna impact the top line... and the bottom line. I'd say as we talked about, you know, the parts of our business that have been most impacted by technology so far, in our media business, our production business, ironically employ more people than they ever did to manage the technology. I think the analogy to the trading floors in your organization is not totally dissimilar. You know, technology creates as many jobs as it changes or destroys or alters. I'd say that if we look at parts of our business, we see clear opportunities to sell incremental AI services. We see the ability, through the power of what we've done, to improve our win rate and gain share.
Then production, which is probably the biggest challenge our clients face, we're gonna tackle that problem. You know, I think clients would love to produce 1,000 more assets at a thousandth of the cost. And I think if you look at other industries that have been impacted by technology... You know, look at the movie industry. As AI has reduced the cost of special effects, the cost of making movies has increased. We've invested more back in quality, and I think that AI is gonna enable much more personalization, much more creative volume of creative work. So I don't think it will necessarily be sort of value destructive or value destroying. It will just enable different pricing models.
The PDP generator that Stephan showed you earlier, you know, we're charging per PDP, and we share some of the benefit with our clients, and we keep some of it ourselves. Do you want to talk about that?
Yeah, look, just to build on that, before I get onto the investment, you know, I think what is really exciting for us is the flexibility it's gonna give us around different commercial models. And, you know, a good proportion of our business today is performance-based. We see opportunities to do more with that. We talked about some of the benefits that we're already seeing from WPP Open and AI, and that's, you know, faster ideation, faster deployments for clients. That frees up our creative teams' time to do more revenue-generating work, which will be accretive to margin. But really, the more exciting thing is what it can do for the top line from a commercial point of view.
You know, I touched on as well in the front office and how we deliver for clients, the opportunity for us to use AI and Satalia, in particular, to really optimize better our resource management, and that's something that, you know, Daniel and the team are partnering with VML on. So there are definitely opportunities as well, on, on, on the front office to reduce costs. And then, of course, in the back office, it's still very early days, and we have a big back office program ongoing. We're doing things there like automating coding, which is helping our back office teams do more quicker, you know, unpick lots of our data quicker, than we would do manually. So lots of opportunities, for us to be more productive. It's not...
We have built significant savings into our plan, uh, for this, so we see it as, you know, underpinning the plan. And then on the GBP 250 million, so, you know, this is not incremental. You can all breathe a sigh of relief. So about 80%-90% of it is OpEx, and the rest is CapEx. And we have been increasing our investment, as you would expect us to, uh, be doing, in the area of our proprietary technology and, and AI and our data over the last couple of years. So every year we've been, we've been increasing that. And in the plans for 2024, that 20-40 basis point margin improvement that I talked to, we have assumed a further increase in that this year, and that's really as we talked about our technology and our AI.
You've already seen today that we have brought to life, we have been investing, and you can see that investment starting to pay back for us.
Very good. Next, who's going to... do you want to go Julien next?
Julien Roch, Barclays. Thank you very much for all those presentation. My first question is, what does medium term means for margin? Is it three, five, seven years, or should we take the 2024 increase of 20-40 basis points and say that's kind of the cruising altitude, and therefore you get to 16 in 2027? That's the first question. And on cash flow, you've been very clear on restructuring costs. You also said neutral working capital in 2024, so is that the cruising altitude going forward? Are you working capital neutral going after 2024? And then, several times you mentioned higher interest and taxes. Can we get some color on that?
Yeah. So it sounds like you want me to give you 2025 guidance, which I can't do.
Okay.
Let me talk to you about some of the levers. In terms of medium term, look, typically, I think we would think about medium term as three to five years. Let me just help you understand how we're thinking about that margin acceleration. You know, we talked about the GBP 125 million savings, most of that coming through by 2025, from the three strategic actions that we've taken, and that will really change the cost base of our business. You know, I don't need to tell you that, but 125 equates to roughly 100 basis points of margin. Now, I also talked to the, you know, other ups and downs in the P&L.
You know, one in 2024, we'll be increasing our incentive versus what we're expecting to land in 2023 and where we anticipate we might be in 2024, so that, that's coming off a little bit. On some of that incremental investment I talked about, you know, we're using gross savings from all of the good work that Christian and the team are doing on GroupM to fund some of that incremental investment, but the GBP 125 million is net. So in terms of, you know, the... Should you just take the 20-40 and apply that each year, I'm expecting that we'll see an acceleration in 2024 and 2025 on our margin improvement, but then improvements from 2026 as well.
If I talk about the other two buckets of opportunity that we have in margin, so efficiencies, back office and front office. You know, some of the back office we're already delivering through the IT program, procurement, real estate, that we have been doing for the last three years. We're, you know, actually ahead of plan on some of that stuff. And finance, you know, we're starting to see some savings this year, but again, I'd expect those to and be higher in the H2 years. And then on the commercial delivery, you know, the utilization, systemization of freelancers, we're already delivering savings in 2023 from that. I expect more in 2024. GDCs, you know, we have established GDCs today. We want to ramp that up. I'd expect those savings to be more, skewed to 2025, 2026.
I think hopefully that helps give you confidence in terms of our delivering the 16-17 and how we think about some of those levers to get there. I mean, the final one, Julien, is, of course, the operating leverage that I had in the waterfall chart as well. And as we get towards our medium-term growth target, that, of course, will give us greater operating leverage through the business. So the way to think about it really is, the operating leverage that will come through and then realization of those savings that I've shared. And then on cash flow, what was your question on cash flow?
The first one is on working capital, neutral in 2024-
Yeah.
Is it neutral in 2025, 2026, 2027? And then decrease in interest and taxes.
Yeah. So on the working capital, we have trade and non-trade, and we'll share more where we are today in 2023, but we've seen certainly an improved position from where we were in 2022. In 2024, we have said that our total working capital would be flat. We have a benefit in non-trade from an inflow from one of our campus funding structures, so that will be about GBP 90 million. So that is a benefit in 2024. And as we go forward beyond 2024, the things that impact non-trade are really variability of incentives. So as our incentive grows, that becomes a bit of a drag. I'd expect that campus funding structure to fall away.
I'd expect the prepaid contracts that we've seen fall away, and there'll be a little bit of a headwind from tax on media billings and non-trade. On our trade working capital, you know, I'm really pleased with the focus across commercial and finance, this year on trade working capital. We'll continue that with the incentive this year. You know, as Christian said, we have over $60 billion of billings, so $100 million either way is not significant when you think about those billings, but we will focus on trying to hold our trade working capital flat.
All right, next. And you can—By the way, the team are all here, so you don't have to... Joanne and I don't need to answer every question. Feel free questions to the team. We'll work back in the middle. Yeah, in the... Here, you want to go to Steven, and then we'll go to Adam afterwards.
Yeah, hi there. Thanks for everything today. Thanks. It's Steven Liechti from Numis. Two from me. One is, the 3%, like for like, I know it's plus in the medium term. Just with what you're talking about in terms of the investment you're putting in tech, AI, and all the stuff, the TAM, that's out there, is 3% that challenging for you as a business? And perhaps you could just talk about that a bit. And then the second question is, I don't know if anyone else saw a seminar last week where all I got was about 2.3 billion data points on individuals that were talked about, which was why that particular business was so successful. I'm just wondering, in the context of the data that, that-
Yeah
... some of your peers are talking about, and you mentioned 300 million sort of data points in the U.S., quite what you think of whether you need that, those sort of data points, and just put some context around that. Thank you.
Yeah, so I think just I mean I tackled the first question quite simply. Look, 3%+ is what we think of as our commitment to you. That's what we need to deliver, and I think we'd like to do better. I mean, emotionally, rationally, I sit in this presentation like you sit in this presentation, you should be five, you know? So, or more. You know, so I think that, you know, we see a good opportunity ahead of us, but I think at this point, what we want to say is 3%+. We did 2.6%+ over the last four years. By the way, during which time we had COVID, a war in Ukraine, inflation, interest rates, I was about to say something I shouldn't say.
Lots of things that have made life more difficult. So I don't think that, as the business has got stronger over that period, we shouldn't be able to do 3%+, notwithstanding, you know, the headwinds you have a little bit in 2024. On the data question, look, I know, I think we've made clear, we think it's about how we use data in our business is what matters to our clients. I think we can serve our clients well with the data that we have, and I think we'd say that AI is going to open up a whole use of sort of unstructured data that doesn't see it attached to an individual.
You know, whether someone buys a tin of cat food or doesn't buy a tin of cat food, it doesn't necessarily help you devise, you know, brand campaigns for cat food. And I think Daniel did a very good job of explaining, you know, lots of other things are going to get involved in building these models and making things successful. And that's our view, and I know it's a debate we have a lot. We do have proprietary data, and as Evan, Christian both said, you know, I think we just need to get... We have access to so much through our partners, and the trick is, you know, do you have a piece of data? Can you use it, and can you activate it?
In many of those cases, the platforms are much more powerful owners of the data because they own both the data and the platform. And I think, you know, the way the cookie legislation and privacy regulation is going to go, it's going to be much harder to activate individual personal information, but we have to see. So I think we're comfortable with where we are, and when we tell more, you know, compelling story and a more consistent story, and you see the impact of what you've seen today, I think that we'll see that in what we do. Okay, then, Adam. I think we can do one question for now. We have 22 minutes left.
Just one? Okay, I'll pick this.
Your best question.
This is actually a question for Christian, so it puts you off the hook.
Yeah, for Christian. Yeah.
Yeah, if you're happy to answer, Christian.
Yeah.
I just wanna talk a little bit about GroupM-
Mm-hmm
... and scale in media. And I suppose my question is, can you say a little bit more about why scale matters in media, and why you're not the fastest growing media agency in the world, given you have the most scale? And if scale is helping you in Europe and Asia kind of keep your number one position, is that a problem for you in the U.S. where you're not number one? So just trying to understand where scale is helpful, where is it not helpful? Thank you very much.
C.J., do you wanna?
Yeah. Thanks for the question. Well, it's kind of linked a little bit to your last question, also, whoever asked that last question about, you know, GBP 2.3 billion or GBP 300 million or whatever number. I mean, I think scale is important to a point, so it gives us all the benefits that I talked about earlier, and I think a lot of that is, you know, what you can look at in the industry and how much can we pull through. And at some point before we had AI and technology to actually process all of this, it was almost insurmountable. It was just. It felt like infinite.
So scale is very, very important in terms of, if you get to the specifics, freights, just how much can you actually buy and how can you deal with volume, and obviously, the more you can do and the more you can make commitments to media publishers, the better value you can pass through to your clients. So scale being number one, number two, number three, like, you know, we compete different levels on that. But I think you have to be top three in order to be in any market in the world and be effective. Two, it gives you the power to leverage that on all the different global spots that you need to be.
I mean, when you saw Manolo talk about what it takes to launch, I mean, I was just thinking as he was talking about, like, am I gonna get in the drone planning business, and how am I gonna synchronize the buy for 82 countries in a drone air show, and what's that gonna look like? But I can do it. Like, I'm probably one of the only companies in the world that can do it, and that's scale, right? So how do you execute new ideas on new platforms all the way integrated through to creative and everything else we need to do to prove the effectiveness of that? I think where scale gets a little ludicrous is when you start making huge claims that I own more data than anybody else, or I own more insights than anybody else.
I mean, I can pick a cookie and look at infinite amounts of data points around that cookie through the entire partner ecosystem. And I guarantee you, Google, Meta, Amazon, they've got more insights available for you about that, whatever you wanna call that, user ID, cohort, cookie, whatever it is, than I could ever amass in my life at GroupM alone. And why would I? That's, that's what we do. We play in the middle of those three connection points I talked about to begin with. My job is to understand insights about a consumer, and that's why we invest heavily in user ID, in how we onboard data, how we take our consumers' data and bring that in.
And we have an ample amount of data to take that and then go activate in Google or in Meta, and these other places, so that we can create the right profile to build in those environments. So... And let's also not get lost in this data conversation around the fact that only half the media is digital right now. So we still have to have all that scale in other places in order to do the television print, out of home, everything else to make that work. And you kind of had a second question for me, but I lost track of it.
No, no more question. One question. All right.
Okay.
Next, we're gonna go over there. Tim.
Thanks. Actually, I'm gonna hand it right back to you, Christian.
Yeah.
It's Tim Nollen from Macquarie. Maybe an extension of the discussion on GroupM, which is. It's a very broad question. I'm asking it intentionally broadly to see what you might be able to enlighten me on. Given the depth of relationships that WPP has with publishers, with media owners, and given the depth and the breadth of the data that you have from your brand advertiser clients, and given all this discussion today about integration and simplicity, I'm wondering, how might the advertising value chain evolve using more AI tools over time?
Do you want to do that, Christian?
Do you want to do it, Mark?
No, I think you're very good to answer that question.
When I hear you ask the question, I... How does AI start to change the supply side of our business-
Yeah
... and the buy side, and what does that look like as we sit in the middle? So I would—I have always said, I think technology is gonna evolve to the point that we move to more of an outcomes business. And Mark talked about, you know, some 25% of our business already sits probably outside of an FTE basis. And I think part of the challenge of actually moving to an outcome-based business has been: Can we isolate goals? Can we actually set campaigns with goals? When I first came in to GroupM four or five years ago, you know, surprising talking with most of our major advertisers, how few actually set media budgets against goals, and then how you'd have arbitrary budgets.
Oh, we'll spend GBP 20 million on this and GBP 50 million on this, and this much in live sport, and these kind of things." When really what we want advertisers to do is move to a world we say, "Okay, how are we trying to spend to opportunity, and how do we define opportunity?" And can we define opportunity in a way that you can use algorithms and AI to go optimize against it? So that'll happen really fast once we get that sort of done, because it's the speed of technology.
That will profoundly affect the publishing side of the business, that has to sit there and say, "Okay, how do we make sure that we have enough inventory available that we can optimize at that sort of speed?" It'll affect the brand advertising side of making sure that every single brand advertiser understands how to set metrics, so that you can actually then create goals against that. It'll affect our side because we'll start to look at, "Okay, let's get paid on objectives and how much goal we've reached, and can we get different thresholds and different tiers within that so that we get compensated differently?
Yeah. Okay, so I think... I mean, one observation I'd make, which is a slightly different response to Christian, is like, one question we get asked is: "Why don't we just go to Google or go to Meta and use their algorithms to buy the whole thing?" And I think there, the clients want to control their own brands. You not gonna have the Google representation of your brand on Google, and the Meta representation or brand on Meta, and the, you know, on each platform. So I think you are gonna have to have people like us, you know, whether you call us agencies or whatever we... platform, I don't care what we call them. The people that help our clients manage that brand and how they express it in the right way, in the in all of their different channels.
Let's take a question. There's a question on this side of the room. Yeah, over here.
Hi, Laura from Morgan Stanley. Thank you for the presentation. So I had one question on WPP Open. So you showed a lot of great examples about the brains and Milka. How much of this is already up and running? And if it's not yet up and running, like, what's the timing for implementation, or like, what are the next developments to come on this platform?
Yes, I think it's pretty clear. I mean, Stephan said we've got 28,000 people using the platform today internally. We're deploying it inside, you know, two or three of our major clients that we could talk about. And elements of the platform, like the, the PDP generator, are being activated. So I'd say it's sort of fully, fully functioning today. It's part of our pitches and our new business presentations, and it's gradually, we're adding functionality. It's really deployment. I don't have anything to add to that, Stephan, but not really.
No, I would just say, I think the ambition is obviously that ultimately we deploy Open for all our large clients globally. And I think, as you saw in the model, the ability to integrate services across our various functions for clients is really appealing. So, you know, we do see it as a growth engine. We have an increased win rate and new pitches when we use Open as the foundation of the sell. And so it's a key strategy for us going forward.
All right. I think there's the ability for people to ask questions remotely. No?
I think we'll take the questions.
Okay, we'll take the questions in the room, and then we run out, we'll take them remotely. So there's a bonus for coming here. Richard, do you have a question?
Thanks very much. I think I know what your response might be, but, you know, AI and personalization is something we hear a lot about from-
Yeah.
and maybe this is a question for Stephan as well.
Yeah
... from Google and Meta and Amazon as well. And I guess the wider question when you think about them both as large clients of WPP and potential competitors, is how do you ensure that their AI and machine learning doesn't simply learn from you and grab the business? Is it the client interface that defends your position? Is it something about the technology stack that you build? But how do you prevent their AI and personalization, which is obviously, as Christian said, at a greater scale, from eventually taking the incremental business in the market?
Yeah, I think, I mean, it's a little bit of the comment I made before. I don't think clients are gonna want to go to Google and let their AI do all their work, represent their brand, and do that personalization, because the way they personalize it will be different from the way Instagram personalize it. By the way, consumers exist on both platforms, so there'll be this congruity in clients that want to see a consistent approach. I don't think it's that straightforward. I think secondly, you know, you know, we've moved past frenemies at WPP, thank God. You know, these people are our partners and our clients, and actually, the better they do, the better we do. Now, we have to protect our clients' information, and Manolo, maybe we could talk to you about that after this, if you've got time.
We have to protect our clients' information, and actually, what we need is an unfair data advantage over the platform. Like, we need to know more about an impression than the platform knows 'cause we need to know our clients value it more than the platform knows. So I think in a sense, that's why it's important for us to have that data advantage, and particularly when clients have their own information, be able to deploy client information into platforms to protect it. So I think. And then just the other question on AI. Look, I mean, the amazing thing is these companies are making these AI products available. I mean, not quite for free, but, you know, the cost of running Open is much less than you would imagine at the moment per query.
I mean, these things are very powerful at a very low cost, and that is quite empowering as well. All right, who's next? There's a hand down over here. No? Come on, any final burning questions? All right. So look, I think thank you all for coming. I think just a few sort of closing comments from me. Look, I think we always get a lot of value as a leadership team from bringing these sessions together. It's a lot of work, but I think the team get value out of doing. I think hopefully you can see, you know, why we're optimistic and positive about the future opportunities ahead of us.
You know, the AI opportunity that we talked about, the ability to power our clients with creativity and creative transformation, and the power of the new brands we have in VML and GroupM. You, analysts, investors, shareholders, watching online, I hope you found it, you know, as compelling as we did. It's important to us to have supportive shareholders, important for the leadership team. So thank you for that. We've got some time upstairs for questions, and you can see a demo of what you want. And then thank you all to all the team over here, behind the scenes, Harley and everyone that pulled everything together. We're, you know, proud of what we've seen, and hopefully, you've have an insight into where we're heading and why we're positive. So thanks very much.
Thanks, everyone, for listening.