With companies poised to issue 3rd quarter results in the next couple of weeks, media and marketing analyst Brian Wieser issued an agency preview note today projecting little to no growth for the large independent agency sector. The major holding companies may fare a little better given easing comparables versus Q3 2022. 

Wieser based his assessment in part on employment data from LinkedIn for a composite of 30 of the largest independent agencies. In Adland, he notes, “headcount growth is a proxy for revenue growth.” 

“I suspect the same factors causing a slowdown for some larger agencies are at play [for independents]: falling spending from technology firms,” Weiser asserts. Tougher year-ago financial comparisons for independents also contributed. 

He noted statements from Accenture executives on its earnings call last week noting that communications, media & technology clients cut spending by 12% versus an overall gain of 4% for its most recent fiscal quarter ending in August. “This follows on recent commentary from S4 Capital and Interpublic conveying similar trends for those agency groups,” Wieser wrote.  

“Although economic conditions are still mostly positive, and my expectations for advertising is still to see stronger growth in the third quarter, it may very well be that the cuts we are seeing from tech companies could further erode growth for the largest agencies, too,” Wieser added. 

“On the other hand, the relatively easier comparables that large holdcos have from the year-ago period continues to suggest that they should have been able to fare better than the independents during the third quarter. We’ll know more in the next few weeks as their results come out.”