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Havas and Interpublic: time for CEOs to produce a plan B to combat slowing agency market

The big marcoms companies are all slowing down, Interpublic less so than the others.

In Q3 2016 Omnicom’s organic growth was up just two per cent while Publicis Groupe was becalmed on 0.2 per cent. Now Havas CEO Yannick Bolloré has reported a two per cent increase in Q3, down from 2.7 per cent in the previous quarter. He blamed this on US “fantasy sports company” being forced to stop advertising (what kind of sports we wonder).

Interpublic clocked up three per cent growth in Q3, continuing its recent trend of nudging ahead of the competition, and CEO Michael Roth says he expects to hit between four and five per cent for the year. WPP has yet to report but CEO Sir Martin Sorrell has said often enough that he expects three per cent growth this year so that’s probably what we’ll get.

Interestingly Havas’ Bolloré (below) said that the UK was up 8.6 per cent, now accounting for 13 per cent of Havas revenues worldwide, and that he is still keen to invest in the UK despite the Brexit vote. Havas recently bought UK entertainment media group Target.

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We haven’t yet seen any dramatic gains from the recent round of media and creative reviews (although Roth said new business played a part in IPG’s performance). Publicis, thopugh, is showing the pain of losing big media accounts including P&G in the US.

Omnicom should benefit, at some stage, from Hearts & Science, its new media network that’s won P&G and AT&T, $7bn in media billings. If it doesn’t we can draw our own conclusions about H&S pricing. The same applies to big DDB creative win McDonald’s which is a payment by results deal.

Numbers like these are a big poser for the CEOs and CFOs. How do they keep investors happy when things are clearly slowing down? Cut more costs, which means jobs? But agencies are already under pressure (from in-house agencies and the like) for their supposed inability to service clients properly.

Time for the CEOs to earn their vast pay cheques with a plan B.

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.

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