Advertising companies are protected from the return of customers' marketing costs, the prospects of 2025 are more and more confused with the industry.
Although companies such as the Publicis Group SA and New York headquarters in Paris Omnicom Group Inc. Both recently scattered the idea that tariff uncertainty had already squeezed customers' marketing budgets, they did not leave the chance of the upcoming bumpy road.
“Of course, many of our customers are facing a very difficult situation, as tariffs, inflation are growing and geopolitical contexts are insecure than ever,” said Arthur Sadoun, CEO of Publicis. Although it has not yet been realized in the company's numbers, “we were able to experience the cuts of many of the customers of many industries throughout the rest of the year,” he added.
Some companies are already tightening budgets. Fortia SE, a supplier of auto parts, reduced marketing and travel expenses, as he expects the tariffs to damage the business. “Any external expenses, the company that runs out of the company, is currently under strict control,” said Olivier Durand, CFO, that in a profit speech.
According to Annick Maas, an analyst at Bernstein, the automotive industry, one of the most vulnerable sectors in the trade war, is likely to be managed in limiting advertising costs.
“This is a very logical and first place to reduce the uncertain or arrogant environment, as it is much easier to reduce your advertising budget compared to the dismissal or closure of people,” said Craig Huber, a research analyst at Huber Research Partners.
The flexible nature of marketing expenditure led to an Omnicom's careful approach to its prospects, reducing organic growth to 2.5% to 3.5% earlier.
In Public, 4% up to 5% of organic net turnover on organic net sales, 4% was a “solid floor”, which is in the current economic climate, Sadoun said. The expectations of analysts are currently located from the center of the range. Bloomberg's intelligence Matthew Bloxham announced that estimates and investors' feelings will continue to be able to decline a sharp decline in economic activities, Bloomberg's intelligence Matthew Bloxham said.
WPP PLC said he has not yet seen customers return to advertising due to tariffs, although he warned that this year's sale will remainflatOr a decline of as much as 2%.
“Uncertainty is not great for business confidence and we talked about it when we guided us for a year,” WPP CEO Mark Read said in an interview on Friday.
The Interpublic Group of Cos Inc., whose acquisition by Omnicom plans to complete this year, said the media market has been firmly in April and the consumer has been durable. “If the economy is slowing down, we would see it in projects because they are somewhat more discriminated or digital spending that you can act faster,” CEO Philippe Krakowsky said with analysts. “But at the moment, everyone is trying to understand when clarity is being measured.”
Previous experience
Businesses may be troubled to make drastic budget cuts, fear of falling out of the favor of consumers. “When these advertisers learned something in the financial crisis during cooling, those companies that dramatically pulled back in advertising damaged their long -term outlook,” Huber said.
According to Bernstein Maasi, reducing “contradictory” advertising is during economic stress, because it is the time when it is good to market to consumers who are stricter with their budget, according to Bernstein Maasi. The advertisement was first reduced in earlier recessions, which damaged Publicis, IPG and Omnicom.
“If you only have 3,000 customers and thousands of your customers have budget pressure, it will affect you more than if you have thousands and thousands of customers,” Maas said.
Even if drastic cuts are not realized, advertisers are more tactical, focusing on retail networks, tools with artificial intelligence and other digital first campaigns, while spraying away from TV advertising, Nat Schindler, Scotiabank analyst at the beginning of this month.
Alphabet Inc. Search ad business created sales$ 50.7 billionIn the first quarter before analysts' assessments. The insurance, retail, health and travel industry helped to bring the unit, the executives said in an investor call. Digital ads Peers Meta Platforms Inc. And Amazon.com Inc., which discusses next week, is a high strip that investors are looking for signs of a slowing advertising market.
The second quarter “is to design control, caution and conversions,” said Schindler. “For advertisers, this means keeping spending where the results are clear and the choice where they are not.”
This story was originally reflected on Fortune.com
