In this recent article in Campaign magazine, Lorna Tilbian joins other industry experts with her thoughts on declining agency valuations. The full article which was published on 25 October follows, with thanks to Campaign for their permission to republish here.

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Are ‘struggling’ agency groups dragging down valuations acrossthe sector?

Most agency groups have seen their share prices slide in 2025.

Gideon Spanier

WPP’s stock price has collapsed by more than 50% since January, after cutting its revenue forecast and losing some big accounts. Other groups have also had a tough time. Even Publicis, which has consistently been the best performer in the sector for the past three years, has declined by about 15% in 2025 after hitting record highs last year.

While Omnicom, soon to complete its merger with Interpublic, is down only about5% since January, this followed a 16% drop at the end of 2024 in the wake of the announcement of its takeover deal on 9 December.

Publicis, Omnicom and Havas have all reported rising revenues in 2025, while WPP and IPG have warned they expect revenues to decline. Some smaller players such as S4 Capital and M&C Saatchi have also forecast mid-single-digit revenue declines.

At Publicis' Q3 results, Arthur Sadoun, its chief executive, blamed “struggling” rivals for dragging down agency valuations. He told Campaign: “The reason why the stock of every holding company is being affected at the moment is because actually the entire industry is affected by the performance of some of its struggling players.” He did not, however, identify any competitors.

Yannick Bolloré, chief executive of Havas, the share price of which has dropped about 8%, offered a different view, as he suggested it was fears about artificial intelligence that were affecting agency stock prices. Bolloré told Campaign: “I think the main reason is that investors still don’t know if the advertising industry will be an AI winner or an AI loser." Although, he added, he has “a strong conviction” that agencies can be an AI winner.

All of this comes against a backdrop of macroeconomic and geopolitical uncertainty, including US trade tariffs.

So how fair is it to say “struggling” agency groups are dragging down valuations across the sector?

Peter Reid

Group chief executive, MSQ

It is not that long since agency holding groups traded at mid-teen [profit]multiples. Yet right now with Publicis trading below 10 times and WPP and Dentsu apparently languishing below five, it is hard to disagree that the weaker performance of WPP, in particular (given its profile), has been a dragon both valuation and sector sentiment. 

Similarly, I can sympathise with Arthur [Sadoun]’s view that Publicis hasn’t got the credit for the success of its differentiating, strategic moves – above all putting Epsilon at the centre of all its activities and building out a more "product-led" and tech-enabled business. 

But this is only part of the story. Yannick [Bolloré] is also correct that investors are hugely uncertain about the impact of AI on the industry – and I don’t think the sector will see a rerating until this plays out further (even if Publicis is making the right moves in the face of this transformational shift).

And, as ever, there is also a more prosaic explanation. We are all impressed with Publicis’ recent performance relative to peers and the market – but in truth it has delivered like-for-like growth of less than 6%. So, if it, or other groups, want to get back to (double-digit) tech-like multiples, it probably needs to deliver more tech-like growth rates.

Fiona Orford-Williams

Director, Edison Research

There’s certainly a recalibration going on and perhaps some of the agencies haven’t managed to successfully communicate to an investor audience on how their businesses will look down the line.

A combination of factors – macroeconomic backdrop, the major tech companies hanging the way they approach their own marketing, fear of disintermediation and disruption to the business model from the integration of AI – all contribute to the sector falling into the “too difficult” bucket when investors have much clearer propositions in front of them. Without an underlying appetite for the shares, prices have continued to drift, and the multiples have eroded to a level for some of these stocks that implies that their future is utilitarian at best.

This approach, though, misses how these holding companies have been mutating. They have a deep understanding of the value of data and increasingly sophisticated AI-driven solutions which should deliver value for their clients.

Ian Whittaker

Founder, Liberty Sky Advisers, and Campaign columnist

Toa degree, yes, the issues of struggling agency groups are bringing down the whole sector. However, that is not the complete answer.

Share prices reflect not just current performance but future expectations. There is no doubt the markets are concerned about the impact of AI on agency models, especially given Mark Zuckerberg’s comments about Meta being able to provide aone-stop service to advertisers. Until the markets feel more comfortable on this, concerns will remain. 

Ajaz Ahmed

Founder, Studio.One

Publicis is in a league of its own, or as it likes to say, "a category of One" and, given its consistently excellent numbers, deservedly so. You don't seePublicis bragging about the massive sums it is spending with technology providers because strong results being delivered for clients and shareholders do the talking instead.

Another reason Publicis doesn't need to boast is because it has neatly integrated necessary media, data and tech expertise in-house, rather than having to outsource. Less well-organised ad groups trade well below the sum of their parts, a structural penalty known as the "conglomerate discount”.

The market sees no value in duplication across agencies, and further penalises the cost, bloat and unnecessary overhead of owning dozens of operations. Priced into valuations is that AI is coming for the average, undifferentiated middle. Investors reward demonstrable competitive advantage and penalise complexity. The question isn't whether struggling holdcos are dragging down sector valuations, it’s whether the laggards will wake up before the gap becomes insurmountable.

Lorna Tilbian

Executive chair, Dowgate Capital

It is a truism in finance, that one cockroach is usually followed by a hundred others. In a sector that is both cyclically and structurally challenged, it is not surprising to see the smaller – and typically more operationally and financially geared players – underperform and, by extension, drag down the valuations across the sector.

Smaller players (gazelles) are meant to be more nimble and more agile than the big players (elephants) in the face of changing conditions, but in reality, they have fewer resources to fall back on when an ill wind blows. And blow it is with the most uncertain macroeconomic and geopolitical conditions since the global financial crisis has heightened inherent market risk.

In the US, tariffs, AI valuations and President Trump’s threat to the Federal Reserve’s independence are weakening the US dollar, while in the UK the same concerns with tariffs and AI valuations (when America sneezes, we catch pneumonia...) are increased by Rachel Reeves’ threat to increase taxes on property, investments, pensions and inheritance in her next Budget. 

Anthony Freedman

Founder and chief executive, Common Interest

Lots of industries will price something by looking for comparables. Valuations in real estate are substantially based on historic sales of similar properties. So it’s not surprising that WPP’s share price will have some impact on the way the market prices Publicis. But it’s also a consequence of a collection of companies that are more similar than different.

Of course, some holding companies have prepared for the future better than others and that should be “priced in” (and is) but ultimately they are all facing the same headwinds with the same market uncertainties and so I think it’s inevitable to have some level of relative valuation.

The best way to not let weaker competitors’ poor performance have a knock-on effect would be to create a genuine difference in positioning, proposition, offering and business model versus a largely homogenous solution to the seismic changes in consumer behaviour, technology and the media, marketing and entertainment landscape.

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