This Horrific Media Spend Data Says There WILL Be A Global Recession In 2013 (OMC, IPG, WPPGY, HAVFP, AGSL, MDCA, PUB)
The four largest ad agency companies have all reported their Q3 numbers, and all of them agreed on one thing: The economics of media spending and the macro-economic picture generally don’t look good
The pattern is ominous: Revenue growth at Interpublic Group just went negative for the first time since the last recession. All the other companies are trending down. GDP growth is anemic — and that number isn’t the government’s final estimate. The final number may be worse.
This chart plots “organic” (like for like, year-on-year) revenue growth at the four largest ad agency holding companies and compares it to sequential growth in U.S. GDP.
Those companies are WPP Group (which owns Ogilvy, Y&R and JWT, among others), Omnicom (BBDO, DDB and TBWA), Interpublic Group (DraftFCB, McCann and Deutsch) and Publicis Groupe (Saatchi & Saatchi, Leo Burnett and Digitas).
We believe it is interesting because advertising revenues are a good proxy for economic growth globally. They represent a broad range of companies with revenues that come from both the U.S. and foreign countries, and companies signal their optimism via their willingness to spend on ads.
The obvious caveat: The sequential vs. y-o-y numbers are apples vs. oranges.
So is this anecdotal trend real, or a mi! rage? Le t’s examine the evidence.
This is Interpublic’s ‘Powerpoint From Hell.’ We’re basically right back at 2008, according to IPG’s numbers.
It doesn’t matter where you look at IPG, everything is trending negative.
Publicis Groupe’s Q3 earnings contained these grim surprises: It expected 6.6% growth in September but got -1.6% instead. Its clients appear to be frozen in the headlights. (Red emphases added.)
Look at how, moving left to right, the red bars extend away from the gray bars.
Know what that means?
It means, in the words of the Distimo analyst who put together the chart, that “the average number of shares per users are increasing.”
That’s profound: The app isn’t just getting more popular, it is becoming a more important part of its users’ lives.
Dr. Augustine Fou is Digital Consigliere to marketing executives, advising them on digital strategy and Unified Marketing(tm). Dr Fou has over 17 years of in-the-trenches, hands-on experience, which enables him to provide objective, in-depth assessments of their current marketing programs and recommendations for improving business impact and ROI using digital insights.
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