• by David Goetzl  @dgoetzl, November 6, 2007

A new report from Standard & Poor's suggests that while major ad holding companies have had a solid year so far, a slower global economy and fewer acquisition targets could contribute to bumps going forward.

The report--"Industry Credit Outlook: Slowing Economy Hands Out More Tricks Than Treats to U.S. Media & Entertainment Companies in 2007"--notes that revenues at the holding companies have held up well, even as overall ad spending has dropped. But it says "this picture for ad agencies could change in the second half as the global economy slows, and the pace of acquisitions may decelerate as well."

Nonetheless and unsurprisingly, the researcher suggested that "acquisition activity" would remain mostly in "the digital and emerging-market areas." One reason could be pricing: S&P wrote that aside from WPP paying $600 million for 24/7 Real Media Inc., "the average purchase price has been relatively low."

Overall, the report noted the positive organic growth trends in the first half of the year at the major holding companies, except for Publicis. At Omnicom, it was 7.4% compared to the same period last year--tops in the industry. "Revenue growth was brisk across all of Omnicom's business segments except specialty advertising, where revenues declined following the late-2006 sale of a health care advertising unit," the report said.

WPP's first-half organic growth came in at 5.3% versus 2006, helped by public relations and public affairs operations--which posted a 7.7% growth rate in revenues, but remain a small portion of WPP's operations, the report said. Beyond North America and Europe, the growth rate came in at 10.9%, suggesting emerging markets' potential for the company.

IPG had some important new-business expansion from current clients, fueling an increased organic growth of 4.3%--a figure also helped by its performance in the U.S. and Asia-Pacific.

But Publicis Groupe hit some hurdles with an ebbing 1.6% organic growth rate, with struggles in Europe and North America in the second quarter. "The company attributes this to unusually high billing levels in the first half of 2006 and to the cancellation of ad campaigns in the pharmaceutical sector," S&P wrote