Ebiquity warns of 'risk averse' ad market as clients cut budgets

Media consultancy Ebiquity has warned of a “cautious” global advertising market with clients deferring work and cutting budgets.

In the company’s results for the six months ending 30 June, Ebiquity said the market was “risk averse with many global brand owners planning for the short term rather than the long term”.

The consultancy said inflation had started to moderate but there remained upward pressure on staffing costs.

“We are seeing some delays to client commitments and deferred work,” Ebiquity said. “In recent weeks, we have started to see business challenges impact some major clients leading to increased pressure on projects and fees, and some budget cuts.”

The company’s comments come against the backdrop of a reduction in spend among US tech clients that has hit profits at advertising holding companies, including WPP, S4 Capital, IPG and, most recently, The Mission Group.

Ebiquity reported revenues of £40.6m in the first half of 2023, up 11% on £36.7m in the same period of 2022. Adjusted profit before tax rose 8% from £4.7m to £5m over the same period.

Nick Waters, chief executive of Ebiquity, said: “While we are seeing some major customers cutting budgets as a result of prevailing market conditions and trends, Ebiquity continues to trade broadly in line with expectations. Looking further ahead, as the market leader we remain well positioned to help our clients and see further opportunities for revenue growth and margin enhancement.”

Stockbroker Panmure Gordon, commenting on Ebiquity’s results, said: "Macro is undoubtedly weak and the warnings from both agencies and media owners reflect the environment.

"Ebiquity is seeing some modest budget adjustments from a few larger clients and also some deferrals, but the business does continue to trade robustly due to its position as a high-value-add adviser on how to improve efficiency and drive marketing returns.

"The local agency selection (pitch) market is soft after a strong 2021 and 2022 but is anticipated to pick up in 2024.”