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Saatchi & Saatchi owner Publicis Groupe has reported worse than expected third-quarter results, as an "abrupt halt" in client advertising spend saw global revenues go into reverse in September.
It is the second warning in as many days of a slowdown in the advertising and marketing industry, after Sir Martin Sorrell's WPP dramatically cut its full-year forecast and warned of tough times ahead.
Publicis Groupe, one of the world's largest marketing services groups, reported revenue growth of 2% for the third quarter to €1.63bn, only half the rate that investors and analysts had expected, with the listed group's shares falling almost 4% in early trading.
The group cited Europe as the issue with third quarter revenues falling 3.6%.
Southern European revenues slumped by 8.7% in the third quarter. The UK market fell 0.8% while, France and Germany declined 2.2% and 1.8% respectively.
The biggest concern was September, which Publicis Groupe had expected to grow by 6.6%, which fell by 1.6%.
"September saw a downturn as sharp as it was unexpected," said the Publicis Groupe chief executive, Maurice Lévy.
"The slowdown in the global economy – with a particularly sharp downturn in European economies – brought advertising investment to an abrupt halt."
He added: "This was a summer of contrasts: the upward trend continued through July and August, then September brought a sudden downturn in the economies of Europe. While southern Europe has seen a steady decline in advertising markets, starting in September, northern Europe suffered downturns as severe as they were sudden."
He said that advertisers were taking a "wait and see" attitude and cancelled or postponed ad campaigns. Publicis Groupe's home market of France has suffered the most, he added.
Levy hinted at job cuts to come if the malaise in the mature ad markets of Europe in particular continues.
"In the light of current global economic growth forecasts, and the marked slowdown in the mature economies, the group is paying closer attention than ever to its cost structure and adjusting rapidly to the situation over the quarters ahead," he said.
Outside of Europe, Publicis Groupe fared much better.
North America grew by 3.2%, although the company admitted that September revenue growth fell below expectations.
A grouping of nine countries including Brazil, Russia, India and China grew at 8.5%. The rest of the world grew by 3.6%.
"The areas of concern are clearly identified and limited both geographically and by sector and in no way undermine the potential of Publicis Groupe," said Lévy.
UK revenue went against the trend, rising by 4.7%.
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