Following three years of muted growth for Holding Groups like WPP, Publicis and Omnicom, Bank of America Merrill Lynch (BAML) has said it expects some of the world's top ad companies to continue to "underperform" against the overall market once again this year.
In a note to clients, seen by Reuters, BAML analysts said: “Marketing spending is secularly shifting from storytelling and creativity towards technology, customer experience, data-driven and business transformation.”
On the basis of this, BAML reinstated its previous 'underperform' rating following "extensive discussions" with experts across the advertising value chain.
The move comes as Holding groups continue to compete against tough market conditions, decreases in client spend and competition from management consultancies.
Clients are also scrutinising how they work with agencies on the media side, with around $10bn worth of media business coming under review according to estimated from marketing consultants ID Comms.
This week alone, Shell, Asda, HSBC and Procter & Gamble have decided to review their agency arrangements.
Such moves have put agencies the world over on alert and appear to be taking their toll on the share price of the world’s biggest marcomms group, WPP, which slid 2% on Wednesday (24 January) following “fears that budgets will come under further pressure”.