Shares in the big holding companies took a beating as the market worried about the future of advertising revenue and the tightening of budgets by traditional clients.
Publicis Groupe started the slide on broker downgrades following the release of its half year results. The shares lost 6.5% to close at EUR44.20 on Friday in France.
London-listed WPP followed, falling 2.2% to end trading at GBP916.80. In New York, Omnicom fell 1.95% to close at $US79.76.
The market was worried about a one line in the Publicis half year results: "2019 net revenue expected to be broadly stable on an organic basis".
The market took this to be a downgrade on the company's previous outlook which was for slightly higher organic revenue growth in 2019 than the previous year.
And this is what happened:
In its results announcement, Publicis Groupe reported organic revenue growth of 0.1% in the second quarter and headline earnings per share were up 2.5% to EUR1.98.
However, Arthur Sadoun, chairman and CEO, also told of a weakening in tradtional advertising revenue in the US, the company's biggest market.
“... our progress has been slowed down by the ongoing fee reduction on traditional advertising that continued to impact our overall US operations by around 300 bps in the quarter," he said.
Organic growth in North America was down 1.7%, mainly due to weaker spending by clients in consumer goods.
Brokers Liberum, citing weakness in the North American advertising market, shifted its recommendation on Publicis shares to HOLD from BUY.
Omnicom's second quarter results were stronger. Organic growth for advertising was 4.4% higher at $US2.09 billion compared to the same three months last year.
But topline revenue fell 3.6% to $US3.72 billion from $US3.86 billion, mainly due to foreign currency movements, including a stronger US dollar
Omnicom's share price:
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at email@example.com