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Ad-market squeeze hits hard: S4 Capital and M&C Saatchi warn of shrinking 2025 profits
Weaker client spending, delayed contracts and shifting budgets toward AI and tech infrastructure trigger revenue cuts at two of Britain’s largest advertising groups, signaling a tougher year ahead for the global ad industry.
Both firms are now trimming costs and streamlining operations in a bid to control damage.
Two major British advertising groups, S4 Capital and M&C Saatchi have lowered their full-year revenue and profit forecasts, underscoring growing stress across the global marketing landscape.
S4 Capital, which counts tech giants such as Amazon, General Motors and T‑Mobile among its biggest clients, now predicts its “like-for-like” net revenue for 2025 will shrink by just under 10 per cent, with operating profits (EBITDA) falling to around £75 million. That is well below analysts’ earlier expectation of about £81.6 million, as per Reuters.
At the same time, M&C Saatchi was hit hard by the prolonged shutdown of the U.S. government, which reportedly stalled work for its “Issues” division that handles climate, health, defence, and human-rights communications for government and public-sector clients. That arm had contributed roughly a quarter of the group’s 2024 sales.
As a result, M&C Saatchi now expects a roughly 7 per cent drop in like-for-like net revenue for 2025, and operating profits between £26 million and £28 million, a sharp downgrade from previous forecasts.
The announcements spooked financial markets, shares of S4 Capital dropped as much as 11.3 per cent, while M&C Saatchi’s stock plunged around 18.3 per cent during early trading.
Both firms are now trimming costs and streamlining operations in a bid to control damage, but analysts warn these may offer only temporary relief, pointing to a broader, structural slowdown in advertising demand amid cautious client budgets, shifting priorities toward technology and AI, and general economic uncertainty.
This turn of events sends a warning across the ad-services industry: even agencies with large tech and global clients are feeling the pinch, highlighting how fragile the marketing business has become at a time when many companies are rethinking how and where they spend.
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