Two weeks after upgrading Publicis Groupe to a "buy" rating, influential Wall Street media analyst Brian Wieser upgraded Interpublic Groupe to a "buy" as well.
In a note to investors Monday, Wieser wrote that he made the IPG upgrade "ahead of what we think will be solid 4Q earnings and a favorable outlook for 2016, given recent new business wins and momentum across creative, digital and media agencies alike."
Recent wins for the holding company include Johnson & Johnson and Coca-Cola. IPG is scheduled to report its fourth-quarter and full-year 2015 financial results on Feb. 12.
In his note, Wieser also commented on the growing competition to agencies from IT companies like IBM, which has been on a digital advertising acquisition spree of late. He also noted the growing list of big marketers — including L’Oreal and Procter & Gamble and Walmart, among others -- that are taking programmatic media trading in-house.
Wieser posited that the trends — while posing increasingly real threats to holding companies — remain "mostly on the margins." His reasoning: the holding companies have found new revenue growth streams on the margins "by developing capabilities to compete with IT firms themselves."
In general, added Wieser, "where both agency holding companies and technology-focused companies run up against each other, we think that where client decision-makers are marketers, the agency holding companies will come out on top. In situations where client-decision makers are CIOs / CTOs, technology-focused companies will prevail."
Wieser did not offer an opinion on the long-term impact of increasingly heated competition between the agency and IT sectors. "For now," he wrote, "we think that both kinds of companies can capture growth from the rising importance of data and automation in marketing, so long as they can attract and retain talent while continuously evolving their offerings."