Ad executives cautious about growth, gear up for contract battle
By Leila Abboud
CANNES (Reuters) - (This version of the story corrects figures on Publicis contract wins, paragraph 13)
The reluctance of big companies to spend at a time of lacklustre global growth and fewer major sporting events this year are dampening demand for advertising, said the chief executives of two leading ad agencies.
In separate interviews on Friday, Martin Sorrell of WPP (WPP.L: Quote) and Maurice Levy of Publicis (PUBP.PA: Quote) sounded cautious about the prospects for the advertising market, citing a lack of vibrancy in the U.S economy, weakness in Brazil, Russia and China, and Europe's continued fragility.
"There is a lot of uncertainty," Levy told Reuters. "Companies have cash to spend but are not in the mood to do so, and consumers are not feeling confident either."
Research firm Zenith Optimedia, owned by Publicis, recently cut its growth forecast for the global advertising market to 4.2 percent down from 4.9 percent earlier this year.
For his part, Sorrell said that the major companies served by WPP agencies such as Ogilvy and Mather and Group M were very focused on cost controls, sometimes to the detriment of long-term investment in their brands and products.
"Business is tough. Clients are very demanding in an environment where top-line growth is lower than it was before the financial crisis began," he said. Continued...