Dive Brief:
- The Wall Street Journal reports advertising's organic revenue growth slowed in Q3 across agency networks.
- One example includes Interpublic Group of Cos., who reported U.S. organic revenue growth dropped to 1.8% for Q3. IPG CEO Michael Roth said those results differed from the last two years of Q3 growth, but his company reported solid Q3 results overall.
- Publicis Groupe also saw its organic revenue drop 4% in North America during the same reporting period.
Dive Insight:
A possible explanation for poor organic growth results is the ongoing and especially disruptive 2016 presidential election season, which has created uncertainties in the marketplace as advertisers wait to craft strategies and develop budgets until the incoming president and makeup of Congress are finalized.
IPG's Roth said that while the election hasn’t had a serious impact on his company's business, there has been an effect on media supply. “We have to place local media," he stated. "Obviously that was being crowded out by the election. We had to find new ways of reaching consumers in those markets.”
The U.S. marketplace stood out this quarter with the worst performing organic revenue growth compared to Europe and Asia, which is hardly surprising, but even tailwinds heading into next quarter might not provide a big enough boost to get back to prior levels, per the Journal.
A slow quarter follows recent reports that internal industry enthusiasm is slipping, with 47% of those surveyed saying morale is low or dangerously low within agencies.