TAKING THE PULSE: Media agencies will face a reality check in the first-quarter 2009 as the worst recession in decades continues to pummel consumer spending and pressure advertising budgets.

The first quarter, typically the weakest in revenue terms for agencies, will give a first insight into prospects for the rest of the year.

European media agencies' organic revenue growth is expected to decline between 3% and 10% in the first quarter but such declines are largely priced into share prices. Any declines that are less than 5% are likely to be welcomed by the market.

Larger agencies like Publicis Groupe SA (PUB.FR) and WPP Group PLC (WPP.LN) are widely expected to fare better amid the crisis this year as they are able to offer clients better deals for large accounts. Publicis started the year off strongest with the Carrefour SA (CA.FR) account win, analysts say.

They have also diversified to help offset the advertising decline; WPP bought market research firm Taylor Nelson Sofres last year to combine with its own Kantar market research business.

Analysts are keen to get more comments on outlook for the second-quarter and the rest of the year in order to find out if the market has hit bottom, or if worse is yet to come. The market will also eye any new signals of sector consolidation, especially on a long speculated move by French investor Vincent Bollore, who holds a 30% stake in Havas SA (HAV.FR) and Aegis Group PLC (AGS.LN).

COMPANIES TO WATCH

--WPP Group PLC (WPP.LN) -- (April 28)

MARKET EXPECTATIONS: In March WPP guided for a 2% fall in full year organic revenue and the market will be watching to see if the company trims this forecast further. Citigroup expects first quarter sales up almost 40% to GBP2.16 billion, but stripping out acquisitions, this reflects a 5.2% fall in organic revenue. The company is expected to update the market on margins, which it has guided flat for the full year, its balance sheet and cash flow.

MAIN FOCUS: The focus will be on current trading, and whether there has been a deterioration in trading conditions into the second quarter that could affect full year forecasts. The market is also looking for an update on WPP's refinancing of its debt, some of which is due in 2010, and on the integration of TNS. At its full-year results in March, WPP said it was exceeding synergy targets of about GBP52 million. WPP's average net debt at 2008 exchange rates was GBP2.2 billion compared with GBP1.59 billion last year, largely the result of the acquisition of TNS.

--Publicis Groupe SA (PUB.FR)--(April 29)

MARKET EXPECTATION: Publicis already indicated in February that the first quarter should mark a deterioration from the fourth quarter 2008. Since then, chief executive Maurice Levy's comments on advertising market prospects have turned more negative and the market will be looking for confirmation of this. The group also faces a tough comparison base in the first quarter as last year's figures included e-marketing business Digitas for the first time.

MAIN FOCUS: Analysts will eye comments on April and the second quarter, in particular in light of Omnicom Group Inc's (OMC) and WPP's results.U.S.-based Omnicom reports first quarter earnings April 27, and rival Interpublic Group Of Companies Inc. (IPG) reports April 28. Publicis in February said it wants to post the market's best margin in 2009 and analysts are seeking to hear more details about how the company is protecting margins. A clarification of how much is at stake for the agency if one of its biggest auto clients, General Motors (GM) goes bankrupt, will also be in focus.

--Havas SA (HAV.FR)--(TBC)

MARKET EXPECTATION: Havas surprised the market with strong fourth quarter results but the company also faces a tough comparison base in the first quarter. Organic revenue is expected to drop, but not particularly more than the other groups. Management has provided little indication of the trading environment so far this year which leaves earnings visibility very low.

MAIN FOCUS: Analysts will eye any guidance as the company provided little outlook or comments on the trading environment at its annual results presentation in March. But with no analyst call planned, the market is unlikely to get much detail. Analysts are also seeking to find out what impact the Carrefour account loss could have on 2009 revenue and how big the company's potential for cost-savings is.

-- Aegis Group PLC (AGS.LN) -- (Date TBC)

MARKET EXPECTATIONS: Aegis' first quarter interim management statement, coming hard on the heals of its full year results in March, is unlikely to shed much more light on the group's outlook. Aegis declined to offer guidance for the forthcoming year in March. However, an update on the group's GBP20 million cost saving program will be welcomed, as well as any insight on current trading at its media buying and market research divisions.

MAIN FOCUS: With a dearth of outlook expected, the market will instead focus on potential takeover interest from Aegis's near 30% shareholder Vincent Bollore. Bollore is chairman of French peer Havas and a tie-up has long been speculated, more so following the departure of former CEO Robert Lerwill.

-By Ruth Bender, Dow Jones Newswires; +33 1 40 17 17 40; ruth.bender@dowjones.com

(Kathy Sandler in London contributed to this report)