Dentsu Group shares plummet

Four of the six funds tracked by Marketing Report closed lower on 18 August than on 11 August. Only Publicis Groupe and Omnicom held their ground.

The week was dominated by Dentsu Group. The Japanese company reported first-half organic growth of 0.3 percent, lowered its outlook for North and South America and pushed back its margin target by a year. The stock fell 7.2 percent. At WPP, an amended whistleblower complaint in New York put the spotlight on a Sony investigation into the agency's rebate practices.

Dentsu Group

On 14 August, Dentsu Group reported net revenue of 583.1 billion yen for the first half of 2026, up 3.7 percent on a reported basis. Organic growth was 0.3 percent. Adjusted operating profit reached 72 billion yen, an increase of 6.6 percent, with a margin of 12.3 percent versus 12.0 percent a year earlier.

The gap between the domestic market and the rest of the world widened. Japan grew organically by 5 percent, North and South America contracted by 5 percent and APAC declined 3.8 percent. In its guidance, the company lowered its outlook for the Americas to approximately minus 5 percent, compared with minus 2 percent in May. CFO Endo pointed to macroeconomic uncertainty and lost accounts.

The biggest shock for investors came from the company's medium-term planning. Dentsu has pushed its 16 percent operating-margin target back from fiscal 2027 to fiscal 2028.

At the same time, the company deepened its restructuring programme. Global headquarters costs are to be reduced by 30 percent by fiscal 2028, equivalent to around 12 billion yen. So far, approximately 50 billion yen in operating costs have been eliminated, equivalent to $314 million. This fiscal year, 70 to 80 international entities will be closed, with up to another 80 under review for fiscal 2028. Nearly 900 jobs disappeared in the first half, bringing the total to around 3,000 of the planned 3,400 reductions. A broader exit from underperforming markets within two to three years remains explicitly on the table. For the full year, Dentsu expects organic growth of 0 to 1 percent and adjusted operating profit of 166.3 billion yen, 3.6 percent below last year.

WPP

WPP lost 2.7 percent during a week in which the agency group once again made headlines in court. In an amended complaint filed with the New York Supreme Court, former executive Richard Foster alleges that WPP withheld rebates worldwide that should have gone to clients. Foster says he repeatedly raised concerns with management and the legal department from 2015 onward and that his dismissal was retaliatory.

New to the filing is Sony's role. Following the 2023 China rebate scandal, the Japanese advertiser commissioned its own investigation into the agency's media trading activities. According to the complaint, the investigation concluded that around 3.3 billion yuan in rebates were generated in China, approximately $460 million, of which around 800 million yuan went to clients while approximately 2.5 billion yuan remained with WPP. That equates to $350 million versus $110 million, channelled through 47 intermediaries with no independent business activity. Sony described the arrangement in the filings as a global crime scheme.

WPP has called the amended complaint baseless and without merit and said it would file an updated motion to dismiss. In a parallel securities class action in the Southern District of New York, statements from 13 former executives have emerged concerning the group's troubled transformation, including data platform Choreograph's lag behind competitors.

Commercially, the week was better. Waymo selected WPP Media as its media agency for North America and EMEA, covering strategy, planning and buying in both regions. Chief Marketing Officer Suzanne Philion said WPP's global capabilities would help strengthen Waymo's connection with local communities. In India, WPP Media won the integrated media mandate for Daawat, the rice brand owned by LT Foods.

Havas

Havas fell 1.8 percent despite securing the week's biggest new-business win. Asahi selected Havas as global creative partner for Peroni Nastro Azzurro following a pitch that began in April under the guidance of AAR. Havas UK will lead the work, initially across Europe and North America and later in Australia. Incumbent agency McCann will complete one remaining project in the UK. Leo and adam&eveDDB also participated in the pitch.

In the UK, Havas Play announced a partnership with Loughborough University London, giving students the opportunity to work on live assignments for clients including adidas, EE and HSBC through the Talent+ programme.

S4 Capital

S4 Capital barely moved, closing 0.2 percent lower. The only company announcement of the week was administrative: the record date for its first interim dividend was moved from 8 to 11 September. The ex-dividend date will be 10 September, the payment date remains 6 October and the amount is unchanged.

The dividend itself, however, is new. When S4 Capital reported its half-year results on 5 August, it announced the first interim dividend in its history: 1.35 pence per share, equal to half of adjusted earnings per share. Like-for-like net revenue fell 4.7 percent in the first half to £308 million, while operating EBITDA rose 82.7 percent to £38 million. The margin reached 12.3 percent and net debt fell to £66.3 million, or 0.7 times EBITDA. For full-year 2026, the company expects revenue to decline in the mid-single digits, with EBITDA of approximately £85 million.

Omnicom Group

Omnicom Group was one of the two gainers, rising 0.4 percent in a week without company-specific news. The share price has traded within a narrow range around the high-$80s since the end of July.

Omnicom did feature indirectly in the week's news. According to market participants, the group is reducing its use of LiveRamp now that the platform is set to become part of Publicis.

Publicis Groupe

Publicis Groupe was the strongest performer, gaining 3.2 percent and becoming the only fund to end the week clearly in positive territory. The catalyst was LiveRamp's shareholder meeting on Monday, 17 August, where the acquisition was approved with 92 percent of represented votes in favour and less than 1 percent against. Under the approximately $2.2 billion deal, LiveRamp will become a wholly owned Publicis subsidiary once the transaction closes. In the same vote, shareholders rejected, in an advisory ballot, the $82.6 million severance package for LiveRamp's management.

The acquisition fits into the data strategy Publicis is building under Arthur Sadoun around Epsilon and its agentic AI partnership with Microsoft announced in April. At the same time, the deal is raising questions in the market about LiveRamp's neutrality as an identity platform for agencies that are not part of Publicis.

Marketing Report Markets is an editorial analysis of share-price developments in the marcom sector and does not constitute investment advice.