• by Steve McClellan  @mp_mcclellan, March 3, 2017

All of the major ad-marketing holding companies have now reported their full-year 2016 results (WPP reported this morning) and Pivotal Research analyst Brian Wieser calculates that as a group, they averaged 3% organic revenue growth globally and 1.5% in North America.

Wieser included WPP, Omnicom, Interpublic, Publicis and Havas in his calculations to come up with those averages. In the fourth quarter, the groups averaged 2.2% growth globally, with an organic revenue decline of 0.3% in North America.

In North America, Wieser had been expecting significantly better performance — more along the lines of 3.6% in the fourth quarter and 5% for the full year.

Why the disparity? “Overall, we think that the biggest factor explaining the gap is the new marketers who have emerged in recent periods but who don’t use agencies,” Wieser wrote in an investor note today. He cited small businesses generally — many of which opt to work directly with Google and other vendors.

Also, in the U.S., spending was nearly flat among big advertisers last year. With a few exceptions, Wieser reported, median growth in marketing spending was up just 0.3% among the top 200 advertisers who release the numbers.

In addition, clients continue to squeeze agencies on fees, Wieser noted, while competition from independents is increasing.

Wieser also posited that holding company growth last year might have been higher — perhaps by 1% — if more firms used net revenue as the metric defining organic growth. Of the five groups he used in his tally, only WPP reports both gross and net revenue, which strips out proprietary trading activity and related pass-through costs.

According to Wieser, if Omnicom reported net revenue and used it for benchmarking gains, the firm may have achieved more than 4% organic growth in North America for the year, versus the 2.4% it reported based on gross revenues.