Advertising agency conglomerates WPP, Publicis, Omnicom and Interpublic are set to see three years of muted growth, according to a note from Bank of America Merrill Lynch (BAML) analysts.
Businesses are shifting their spending from investing in creativity and "storytelling" to technology and data-driven marketing, the analysts wrote in a note to clients and seen by Reuters.
Companies that weren't traditionally involved in advertising or marketing are buying up agencies, with Accenture acquiring ad agency Karmarama in 2016 and Deloitte buying Swedish agency Acne last August, just two of many deals done by consultancies over the past two years or so.
WPP lowered its expectations for full-year organic net sales last October, citing disruption from Facebook and Google, competition from management consultancies and "zero-based budgeting" from clients as reasons. Paris-based Publicis reported sales up 1.2 percent in the quarter ending September 2017 and said that the environment was "challenging" for its clients.