Ad group holding company WPP slashed its outlook as its Q3 numbers disappointed analysts.

The company, which last week announced a merger between Wunderman Thompson and VMLY&R to form VML, blames a skittish tech sector, citing Meta as one example, given it cut its ad spend 24% in its recent quarter.

WPP, whose creative agencies include Ogilvy, Grey and Taxi, and PR shops Cohn & Wolfe and Hill+Knowlton Strategies, revised its growth forecast downward, from 1.5% to 3%, to 0.5% to 1%. It saw shares fall about 5% to a three-year low after reporting Q3 revenue declines of 1.8%.

WPP’s tech and digital services business fell nearly 13% in Q3, while retail dropped 8.4%. Government, public sector and nonprofit revenue growth was 0%.

Its North American business slumped 4.1% in the third quarter, primarily reflecting lower year-on-year revenues from technology clients and the expected impact of 2022 client losses in the retail sector. This was, the company says, partially offset by growth across CPG, healthcare and financial services clients, with GroupM and Ogilvy both growing in the quarter.

“Our top-line performance in Q3 was below our expectations and continued to be impacted by the cautious spending trends we saw in Q2, particularly across technology clients, with more impact felt in GroupM over the summer than the first half,” says CEO Mark Read, who also noted the tech companies “are looking very carefully at their marketing expenses.”

However, Read noted some positives.

“We continue to win both creative and media assignments from leading global companies including significant wins in the third quarter with Estée Lauder (media), Hyatt (creative), Lenovo (creative), Nestlé (media) and Verizon (creative),” says Read.

The company is reporting net new business performance of $1.4 billion in the quarter and “showed sequential improvement after a tougher first half.”

WPP is reporting that GroupM embarked on a simplification plan in 2020 under new leadership, which will now “accelerate and move to a second phase.” The new structure will retain agency brands EssenceMediacom, Mindshare, Wavemaker and mSix&Partners, but support them with common media products and a single technology platform.

Rival Omnicom Group, which operates creative networks such as DDB, BBDO and TBWA, reported strong Q3 numbers last week.