Shares in Maiden halved, plunging 219p to 212.5p, after the group said sales in the third quarter had failed to recover after suffering a slowdown during the World Cup.
The warning sent tremors through the rest of the media sector, knocking shares in companies with a heavy exposure to advertising spending. Magazine publisher EMAP shares dropped 74p to 940p and Capital Radio shed 16p to close at 574p.
Ron Zeghibe, Maiden's chief executive, said advertising had dried up during the World Cup. "Advertisers looked at the high rates being charged by television and just said, `We're not going to spend'," he said.
"It may be that outdoor advertising is a leading indicator for what's going on in the sector," said one analyst. "But it may also be that when budgets are cut it's the marginal media that suffer."
Indeed, Johnston Press, the regional newspaper group which depends heavily on classified advertising, yesterday sounded an upbeat note about prospects for the year.
But Mr Zeghibe insisted that the outlook for national advertising was gloomy. "I'm talking to media planning and buying agencies and they're all saying the same thing," he said. Roughly 95 per cent of Maiden's advertising comes from large national accounts.
And Mr Zeghibe said the stock market had overreacted to the bad news. "Either the share price recovers or we might as well take the company private," he warned. Maiden's management team control 73 per cent of the company.
The company insisted it would not be cutting its capital expenditure plans designed to strengthen its market position.