Rx: Omnicom Reports Global Organic Growth Up 6.7%
Omnicom CEO John Wren said conversations with clients show an eagerness to increase spending, but whether that will come to pass is somewhat unclear. Notably, if U.S. unemployment continues to be a laggard, advertising budgets can be negatively affected.
"Every client that I speak to seems to have a renewed focus on top-line growth," Wren said on an investor call Tuesday. "With that said, we're going to continue to remain cautious, wait for their budgets -- at least until after we understand the implications of the upcoming elections, and until the unemployment picture in the U.S. starts to improve."
Nonetheless, Omnicom's U.S. organic growth increased 8.4% in the July-September quarter to $1.6 billion, a figure that takes into account the impact of the loss of the Chrysler business. A little over half of Omnicom revenues came from the U.S. in the quarter.
Overall, Wren said Omnicom's aim is to return global results to 2007 levels by 2012. Full-year profits last year were 23% below 2007. Revenues were down $1 billion over the period.
Globally, in the recent quarter, organic growth -- a solid indicator of the health of a holding company -- was up 6.7%. Total company profit was up 5.4% to $175 million.
A strategic holding company, Omnicom manages a portfolio that includes three global ad agency networks: BBDO, DDB and TBWA. It services over 5,000 clients in more than 100 countries.
"While improvements in the economy are inconsistent from region to region, we have been pleasantly surprised by the continued growth in the United States and strength in Europe's major markets," Wren said.
Moving forward, company goals include more acquisitions in emerging markets and divestitures of low-margin businesses.