The share prices of several European marketing groups tumbled yesterday following fears that the ad slowdown in the US has begun to bite across the Atlantic.
A revelation by media buying and market research firm Aegis that European adspend, especially in southern Europe, has dropped since the spring prompted a 20% slide in its stock to 87p – around 67% down on its peak in March 2000.
The tumbling share price comes in spite of an announcement by Aegis chief executive Douglas Flynn that revenues increased over 8% in the first five months of 2001, with the prospect of continuing growth in the next six months fuelled by recent account wins.
Fears that Europe is catching America’s cold also hit the stocks of Havas Advertising. After finance director Jacques Herail forecast that the group would not hit its 2001 organic sales growth target of 10%–15%, shares declined 9.3% to E12.80.
Publicis Groupe also suffered, with a 6% fall following chairman/ceo Maurice Levy’s comments that: “The decline in growth in the advertising market is such that we believe that 1 or 2 per cent will be a maximum for the sector this year” – a reduction from his previous annual estimates of 3%–4%.
News sources: Financial Times; New York Times