Analysts Double Down On 'Material' Facebook Reorg, Other 2019 Predictions

“Material Facebook management changes” is the top of a dozen predictions for 2019 published this morning by the influential equities research team at Pivotal Research Group.

“We predicted earlier in 2018 that within 12 months, Facebook would undergo significant managerial changes at the top of the company, and we’ll stand by that expectation,” write analysts Jeffrey Wlodarczak and Brian Wieser in their year-end predictions report.

“Whether that means one of Mark Zuckerberg or Sheryl Sandberg alters their roles within the company or something more extreme occurs, it seems difficult to imagine that the company’s board will allow a status quo for the chairman, CEO and COO roles, especially as regulatory scrutiny around the world escalates over the course of 2019.”

Other top advertising and media industry predictions by the team include “peak TV getting peakier," that fixed 5G wireless will “fail” to penetrate a mass market, and agency holding companies will grow at a more “normal” rate vs. recent years.



“Not so much of a forecast of change, but a forecast of an absence of meaningful negative change,” the Pivotal team expand on that last point, noting: “Although many investors remain concerned about the health of the traditional agency holding companies, and some may expect permanent decline, barring a recession we think they will collectively grow in 2019. IT services firms are only impacting agencies on the margins, while agencies themselves are increasingly building or buying assets that should help them gain exposure to IT services-related revenue streams alongside existing engagements.

"Pricing and spending pressure will continue, but we think that as time progresses, advertisers will get closer to a bottom in their spending cuts on like-for-like services. Further, the impact of enhanced scrutiny on media agency contracts will probably cause only a limited drag going forward, as most marketers who would have wanted to squeeze spending out (post 2016’s K2 report) through improved contract terms will have done so by now. All of this should help the sector grow closer to a ~+3% organic range this year.”

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