Conference Call Replay | Initiating Coverage of the Advertising Agencies (WPP, OMC, IPG)
June 21, 2018, 10 am ET
Five years ago, when we dropped coverage of the global advertising agencies, we believed the industry was devoid of meaningful investment controversies. Now five years later, we are resuming coverage of three of the leaders (WPP, Omnicom and Interpublic) with an Underweight view on the sector and find ourselves entering a vastly different landscape. Industry growth, which was once easily penciled as mid-single digits, has ground to a halt as emerging competitors, penurious clients, trust issues and digital platforms create new pressure points.
Is it structural or cyclical? To us, there is no debate. This slowdown is clearly structural and bound to continue as Top 200 client budgets remain pressured by their own unique headwinds as new agency competitors (including consultancies) take incremental share. Sectors under pressure have a way of surprising to the downside on valuation, as we have witnessed in our traditional media coverage.
In a clients-only conference call on Thursday morning, Michael discussed our outlook and recommendations for the Advertising Agencies and cover the key questions facing the sector.
Conference Call Replay: Click here
Conference Call Materials: Click here