Publicis Groupe and Omnicom group Inc. both kicked off earnings season for ad-holding companies on Thursday, with both firms exhibiting organic growth.
Publicis’ organic growth was up by 0.8%, versus estimates of a 0.5% decline in the second quarter, with revenue amounting to €2.52 billion ($US2.9 billion). On the other hand, Omnicom said it posted organic growth of 3.5% in its second quarter. Overall revenue totalled $US3.79 billion, which was down 2.4% compared to the same period last year.
But while Publicis credited its second quarter results to improved performance in North America, the opposite was true for Omnicom.
Publicis’ improved performance in North America was the result of several new business wins over the past year, including Wal-Mart and Hewlett Packard, said Arthur Sadoun, the company’s recently appointed CEO. Meanwhile, Omnicom’s U.S. business was brought down by its public relations unit, its shopper marketing and branding businesses, according to John Wren, the firm’s CEO.
“We’re unhappy with it, have forensically identified it and are taking actions to do something about it,” Wren told investors in Omnicom’s second quarter earnings call this morning. He added that the firm’s North America operations would hopefully start to pick up by the third quarter, and certainly would by the fourth.
Both Sadoun and Wren acknowledged that fostering greater collaboration between their agencies as well a push to offer clients more data, digital and consulting services were key to improving their performances.
Wren, for instance, highlighted how its agencies BBDO and Hearts & Science as well as a dozen of its agencies work together on its clients AT&T and McDonald’s.
“We are ensuring that we are organised in a manner that allows us to best serve our clients,” said Wren.
The earnings come at a time when the advertising industry is being upended by digital media and is grappling with the shift away from traditional media platforms, like TV and print. Omnicom, in fact, said that the holding company had disposed off its print services business.
The ad holding firms have also had to contend with some major issues in industry in recent month, including brand safety, where advertisers’ digital messages have increasingly appeared next to sensitive or inappropriate content online.
“There are still challenges there,” said Wren. “They will get resolved over time, but we’re not finished with that yet.”
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