Tech clients are slashing their marketing budgets following the massive layoffs across the globe earlier this year. This is also reflected in the latest financial results of global advertising holding firms.
According to the recent quarterly results from WPP, Q3 like-for-like revenue less pass-through costs decreased by 0.6% with growth in the UK, Western Continental Europe and the rest of of world, offset by declines in North America, with continued weakness from technology clients and in China.
Mark Read, chief executive officer of WPP, said: “Our top-line performance in Q3 was below our expectations and continued to be impacted by the cautious spending trends we saw in Q2, particularly across technology clients with more impact from this felt in GroupM over the summer than the first half.”
Meanwhile, Philippe Krakowsky, CEO of Interpublic Group, also said during the third quarter of 2023, IPG’s revenue performance did not measure up to expectations, “factors that we have identified since the early part of the year continued to weigh on our growth in the quarter. These include the decreases in client activity in the tech and telecom client sectors that have been evident across our industry, and the performance of certain of our digital specialists.”
“Another factor impacting results is increased concern among marketers related to macroeconomic conditions, which led to the delay of projects and sales cycles, as well as slower-than-anticipated onboarding of some new business,” he added.
Potential reasons behind
While the rise of AI and other new digital technologies may have played a role in the reduced budgets from tech clients, Industry players MARKETING-INTERACTIVE spoke to attributed this phenomenon to the increasingly difficult economic and political climates.
Keso Kendall, SVP, APAC at TEAM LEWIS, said economic and political climates make companies more cautious, as well as increased difficulty grasping customer