Advertising Agencies Shift Focus to Digital Operations
As digital transformation revenue grows, agencies are rebalancing portfolios away from traditional media segments.
Updated on Oct. 29, 2026 in Advertising
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WPP and Stagwell reported divergent third-quarter results for 2026, highlighting varied performance across creative and digital-focused advertising segments. While WPP Media saw a modest 0.3% net sales increase, Stagwell's media and commerce division faced an organic revenue decline of 2.1%.
Why it matters
Advertising operators should monitor these contrasting growth trends as indicators of broader market shifts in creative versus digital performance. The divergence suggests that agency success now relies heavily on business mix, with digital transformation and specialized cloud services currently outperforming traditional media segments.
Stagwell reported 7.4% organic net revenue growth in Q3 2026, while WPP's creative revenue declined 5.1% during the same period. Additionally, Stagwell's Digital Transformation operations grew by 23.1%, contrasting with a 19.5% decline in its Media and Commerce adjusted EBITDA.
The players
WPP
A United Kingdom-based global advertising and creative transformation holding company.
Stagwell
A United States-based global marketing network focused on digital-first advertising and transformation.
The details
WPP is leveraging its Elevate28 transformation strategy to reorganize its operations, though its core creative segment continues to see pressure. Meanwhile, Stagwell's recent reorganization of its global media operations reflects an attempt to streamline costs as its media and commerce unit, which accounts for 18% of its total revenue, grapples with profitability hurdles. These firms are adjusting service portfolios to prioritize high-growth digital transformation and marketing cloud offerings over stagnant media buying.
Timeline
Q3 2026 saw WPP and Stagwell report their quarterly financial results.
For the first nine months of 2026, WPP Media net sales remained down 3.6%.
Market Landscape
These results follow the industry-wide trend where agency holding companies are actively shifting investment away from traditional media buying toward digital transformation services. Both firms reflect a departure from the reliance on legacy media segments in favor of high-growth marketing clouds.
Operators should review their agency contracts, as holding companies are aggressively shifting staff toward digital transformation and marketing cloud services. Watch for potential consolidation of media buying and planning roles as these agencies rebalance their business models.
The takeaway
Agency holding companies are demonstrating that creative and traditional media segments are currently struggling compared to digital-first service lines. Operators should evaluate whether their marketing partners have the agility to provide digital transformation services or are trapped in declining media buying models.
Further reading
For more on industry shifts, visit the Advertising section.
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