By Shashwat Awasthi
(Reuters) -Martin Sorrell’s ad group S4 Capital said on Thursday that clients were choosing to spend on artificial intelligence rather than marketing, pushing first-quarter revenue 11% lower.
The owner of ad agencies Monks and MightyHive acknowledged that volatility created by U.S. tariffs would lead clients to remain cautious.
Shares in S4 were trading 6% lower at 24.25 pence by 0912 GMT.
On a conference call, executive chairman Sorrell said S4 expects like-for-like growth in the third and fourth quarters, when it will benefit from a ramp-up in deals with Amazon and General Motors.
“The (growth) pattern is very much skewed to the second half of the year … the pattern is as usual, but perhaps more weighted to Q3 and Q4 than we’ve seen in previous years,” Sorrell said.
Earlier on Thursday, S4 said its revenue fell to 163.7 million pounds ($218 million) for the three months to March 31, but affirmed its forecast for 2025 revenue and operational core earnings to be broadly similar to 2024.
Sorrell said clients had not cut spending due to tariffs but rather delayed making decisions, echoing similar comments from GroupM and Ogilvy owner WPP last month.
He said a potential U.S.-UK trade agreement “may lift some of the fog” resulting from U.S. tariffs.
The U.S. and Britain are expected to announce a deal to lower tariffs on some goods on Thursday, the first such agreement since President Donald Trump imposed levies on countries around the world.
($1 = 0.7510 pounds)
(Reporting by Shashwat Awasthi in Bengaluru; Editing by Janane Venkatraman and Ewan Harwood)
