Martin Sorrell's S4 Capital reported like-for-like net revenue down 12.6% to GBP 179.3 million in the September quarter.
The company said the results reflected lower activity in both content and one of the larger technology services clients.
Full year like-for-like net revenue is expected to be down low double digits as the company focuses on lowering costs, seeking efficiencies and on developing bigger clients.
The pure play digital advertising group has been hit hard by a squeeze on advertising spend among technology companies.
Media analyst Brian Wieser, of Madison and Wall, said S4 continues to struggle largely because of the company’s concentrated client base (16 clients represented 55% of revenue last year) and industry concentration (44% of company revenue comes from the technology category).
Sir Martin, the founder and executive chair, said trading in the third quarter reflected the continued impact of trends in the first half, including challenging global macroeconomic conditions and high interest rates, as well as some underperformance when compared to addressable markets.
"These trends have impacted marketing spend by some technology clients and our technology services practice continued to be affected by a reduction in one of our larger client relationships, as previously flagged," he said.
"Data&Digital Media's like-for-like run rate improved, while Content saw a slight improvement in the third quarter, but did not benefit as much as expected from easier prior year comparisons.
"We continue to focus on our larger, scaled relationships with leading enterprise clients and margin improvement through greater efficiency, utilisation, billability and pricing.
"In light of the continued net revenue softness, we have maintained the heightened focus on cost reduction.
"As in previous years, financial performance will be weighted to the fourth quarter. We remain confident in our strategy, business model and talent, which together with scaled client relationships position us well for growth in the longer term.
"We continue to capitalise on our prominent AI positioning and are seeing multiple initial AI related assignments."
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