Credit: Zbynek Burival via Unsplash
M&C Saatchi, already suffering from tanking revenue and profits, sees pain flowing from the Middle East war.
The company says the conflict will likely to “significantly” impact sport and entertainment and its consumer-facing business.
Other holding groups are also assessing the likelihood of a global slowdown in response to the conflict.
Martin Sorrell’s pure-play digital advertising group, S4 Capital, forecasts a drop in net revenue in part due to the ongoing conflict in the Middle East.
And WARC (World Advertising Research Centre), in its latest Global Ad Spend Forecast update report, has put the Gulf energy crisis in the advertising frame
Food, travel and transport and technology and electronics sectors are among the most susceptible to high oil prices and a prolonged disruption to shipping in Strait of Hormuz.
"Even in a contained scenario, an oil shock of this nature acts like a tax on consumers – pushing up prices while eroding real spending power," said WARC director of data, intelligence and forecasting James McDonald.
“In a more prolonged or severe disruption, we move into stagflation territory, where sectors like travel, automotive, food and consumer electronics take a direct hit from both rising costs and falling demand.
"The net effect is a meaningful squeeze on discretionary spend that puts up to $50 billion of anticipated ad market growth at risk this year, as brands pare back their media investment in a bid to preserve thinning margins."
For M+C, the Middle East represents only 6% of the global advertising group’s revenue.
Net revenue grew 3.6% in the region with growth in advertising alongside positive momentum in the newly established local sport and entertainment offering.
“Growth will be tempered by a client loss in the second half of 2025, and the impact of the conflict in the Middle East on our sport and entertainment business,” the company said.
In public relations, the company remains confident in the medium-term growth outlook.
“Although the outlook for 2026 is more encouraging, PR continues to be affected by our exposure to the softer UK market while S&E (sport and entertainment) will be affected by the conflict in the Middle East,” the company said.
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 adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.