• by Steve McClellan  @mp_mcclellan, March 4, 2013

Not only was 2012 a “tepid” year growth-wise for the major advertising holding companies, it also became progressively worse with each succeeding quarter.

Collective organic revenue growth for the holding companies (Omnicom, Interpublic, Publicis Groupe, WPP and Havas) amounted to just 1.6% in the fourth quarter, according to a new report from Pivotal Research Group’s Brian Wieser. That was down from 4.2%, 3.1% and 2% in the first, second and third quarters, respectively.

For the year, the holding companies had collective growth of between 2.5% and 3%, Wieser reported.

At least for now, Wieser believes combined results for 2013 could be a little better, with growth in the 3.5% to 4% range. But that projection assumes “improvement in global macro-economic conditions,” which Wieser notes is not a given.

But the Pivotal analyst also said he believes that advertisers have adapted what he calls “the newer normal,” which combines a “tight leash” on budgets with more last-minute spending, making it harder to forecast expenditures with precision.

That said, adds Wieser: “Fights for market share between brands seeking to grow in a weak economy are as likely as anything to cause more spending overall.”

Wieser reported that IPG remains his highest-rated holding company stock and the only one he has a “buy” recommendation on currently. (He has “hold” ratings on WPP, Publicis and Omnicom.) Wieser cited IPG’s double-digit cash-flow growth potential. “A higher [share] price is further supported by prospects of further industry consolidation,” he said.

Wieser stressed he wasn’t predicting the imminent merger of IPG with another holding company, but did note that there are some gaps in the Publicis Groupe offering -- notably in Brazil and India -- that would be filled nicely with the purchase of IPG.

“We continue to believe that such a transaction is a reasonable possibility at some point in the future and country exposure such as what IPG has in Brazil and India will surely be cited as supporting factors if it does," he notes.