What a Slowdown in Spending by Some Marketers Means for Ad Holding Companies

livemint.com:

Some advertising holding companies have been reporting weaker-than-expected organic revenue results, raising questions about what that could mean for marketers’ spending with agencies in the quarters ahead. Some experts say the results don’t signal major problems ahead for ad companies such as Interpublic Group, Omnicom Group, WPP and Publicis Group, which own creative and media-planning and buying shops among other specialties.

But others say the results, which reflected delayed projects and lower spending from marketers in the tech and telecom sectors, could be the start of a rough spell for big ad powers. Organic revenue growth removes effects of currency fluctuations, acquisitions and disposals.

“It’s almost like we’re in an unprecedented situation, because there’s just been so many factors playing on the broader economy and the ad market," said Paul Verna, principal analyst at research firm Insider Intelligence. “And the ad market itself has been evolving so much." Here’s what experts are saying about ad holding companies’ second-quarter results and what it means about ad marketers’ spending this year.

What’s been happening with results from the major holding companies? IPG and Omnicom last month reported weaker-than-expected organic revenue in the second quarter, and Publicis, which outpaced analysts’ organic growth expectations, said clients were putting off some projects. S4 Capital, the London-listed digital advertising and marketing-services group, last week lowered its like-for-like net revenue growth target for the full year and said second-quarter net revenue came in below budget, “reflecting the challenging macroeconomic conditions." S4 also said clients, especially in the technology sector, were cautious