The major ad-marketing holding companies didn’t let a just-okay U.S. economy and a recessionary climate in parts of Europe prevent them from
posting big profit gains in 2011.
According to a new report from research firm Marketing Services Financial Intelligence, combined holding company profits in the advertising and marketing services sector were up nearly 30% last year versus 2010. The firm tracked publicly traded companies -- such as WPP, Omnicom, Publicis, Interpublic, Aegis, and Havas, as well as smaller firms -- such as the UK’s Creston, among others.
Combined revenues for the group rose by more than 8%.
The rankings of the five biggest holding companies, by revenue, didn’t change. WPP retained the No. 1 position with nearly $14.3 billion in revenue -- followed by Omnicom, which had nearly $13.9 billion, per the report. Publicis Group was a distant third with about $7.6 billion, followed by Interpublic Group with $7 billion.
Dentsu rounded out the top five with nearly $4.2 billion in revenue. Its acquisition of Aegis Group, expected in the fourth quarter, will make the Tokyo-based company a closer fifth, with about $6 billion in revenue.
While WPP was tops in total revenue, Omnicom had higher revenue growth -- 10.6% last year versus WPP’s 7.9%. "WPP will be hoping that its recent acquisitions of AKQA and Press Index will help to keep it ahead" of Omnicom in the total revenue column for 2012, stated Bob Willott, the MSFI editor who oversaw the report.
The report also noted that operating profit margins improved for the third consecutive year, averaging nearly 15%. Borrowing costs continued to rise and absorbed 10.8% of operating profits.