Reduced agency fees and the in-housing trend are cited as possible reasons for the comparatively slow growth.
The Advertising Association and WARC report found UK ad expenditure increase to £23.6bn last year, a jump of 6.3%, despite Brexit. Agency groups were observed to be growing at a slower rate than the overall industry.
WPP, with one-third of the UK's market share, saw its net sales drop 0.5% in 2018. While revenues (including pass-through costs) rose 1.5%, this was slower than the wider industry. Omnicom’s revenue in the UK grew organically by 0.7%, Publicis Groupe saw its UK revenue jump 3.8%.
The article points out that “radical changes” across the ad industry are bringing larger, more traditional ad agency groups under pressure. Other factors cited are the growing in-housing trend, reduced agency fees and the rise in the number of direct-to-consumer brands handling search and social in-house.
[4 minute read]