... with a similarly downbeat forecast peddled earlier this month by Barclays.
The banks' gloom is partially triggered by Kantar Media's recent estimate that US spending growth slowed from the first quarter to the second quarter. Second-quarter spending was up just 2.8% compared to the same period in 2010. By comparison, year-to-year growth in the first quarter was up 4.4%.
When Kantar released its second-quarter ad spending figures on Sept. 12, svp for research Jon Swallen opined that decelerating growth raised questions "about the durability of an advertising recovery that is into its second year."
"Key indicators are painting a mixed picture," according to Swallen. "On one hand, a majority of media categories actually improved their performance from Q1 to Q2. On the other, spending growth for the top 100 advertisers stalled in Q2, and the ad market became more dependent on the comparatively smaller budgets of mid-sized advertisers as the main source of growth."
UBS said it has reduced Interpublic's organic growth estimate from 5% to 3.6% for next year, lowering the holding company's estimated profit (before interest and taxes) to $725 million from $758 million. That equates to a profit margin drop of three-tenths of a percent to 10%.
For Omnicom, UBS is reducing its 2012 organic growth estimate from 5% to 4.3%. The bank is also slashing $40 million from its estimated 2012 pre-tax and-interest profit estimate to $1.84 billion -- a move that will lower the company's margin by two-tenths of a point to 12.6%, according to the bank.
Neither agency group was prepared to comment on the UBS report.