On the heels of Omnicom and WPP, two of the other big agency holding companies -- Interpublic and Publicis -- this morning reported equally tepid results for the third quarter of 2012, also citing the dour effects of the macroeconomy.
Despite generating its weakest results from its home market of Western Europe -- especially France -- Paris-based Publicis managed to generate organic revenue growth of 2.0% over the third quarter of 2011.
"This was a summer of contrasts,” Publicis Chairman-CEO Maurice Levy said in the earnings statement, “the upward trend continued through July and August, then September brought a sudden downturn in the economies of Europe. While southern Europe has seen a steady decline in advertising markets, starting in September, northern Europe suffered downturns as severe as they were sudden. Widespread as these downturns are, it is France that has suffered most.”
Levy added that since the end of the quarter, “advertisers have increasingly adopted a wait and see attitude, cancelling or postponing campaigns. The situation in the rest of the world is somewhat better, even if growth is slowing here, too.”
Among the reasons Publicis hasn’t done worse was its aggressive diversification into digital media and marketing services, which grew 7.5% during the third quarter, offsetting some of its traditional services.
Publicis disclosed that digital services now represent one-third (33.3%) of total revenue, and that following its planned acquisition of independent digital agency LBi International, digital will comprise 35% of its business -- up from 30.2% in the third quarter of 2011.
The picture at Interpublic was the worst of the Big 4 agency holding companies, expanding organic revenues just 0.9% during the third quarter.
“This year has proven to be more challenging on the revenue front than anticipated,” stated Interpublic Chairman-CEO Michael Roth, adding: “While the third quarter showed strength internationally and in emerging economies, as well as from our digital offerings across the portfolio, this was not enough to offset incremental client caution being felt across our industry, the effect of client losses from last year and the comparison to very strong growth in the third quarter of 2011.”