• by Steve McClellan , September 21, 2011

While the economic outlook is uncertain, and it's hard to forecast beyond the current quarter, Aegis CEO Jerry Buhlmann said that so far advertisers are not cutting back on planned 2011 budgets.  

"We're not seeing the same level of panic that we did during the last recession," Buhlmann told investors and analysts at the Goldman Sachs Communacopia Conference in New York Wednesday morning.

Buhlmann indicated that Aegis will achieve the same organic growth level -- 7.6% -- in the third quarter that it was able to reach for the first half of 2011. "It's harder to guide beyond the quarter," he said. But looking forward to 2012, he said, at least for now he believes it will be a "reasonably good year."

He expects the North American and Western European regions to maintain slower, single-digit rates of growth for the next five years while other regions, such as Brazil, Russia, China, India, the Middle East and Latin America, should maintain double-digit growth rates for the same period.

To date, Buhlmann said, Aegis has achieved $2.4 billion in new business in 2011 -- about double last year's level. He credited the North American management team, led by Nigel Morris, CEO Aegis Media North America, with achieving a turnaround, highlighted by recent wins, such as Disney in the U.S. and Target in Canada.

Part of the reason for the success was a corporate restructuring where five key divisions -- Carat, Isobar, iProspect, Posterscope and Vizeum are now under a single P&L, and therefore, more easily integrated in terms of planning and buying for clients, he noted. Senior managers, he added, are now more motivated to excel because their full compensation is tied to both revenue and profit margin growth. Previously, they had to hit just one of those benchmarks.

Meanwhile, he said that typically, margins for an agency should be around 15% for the U.S. The U.S. group is not there yet, but is making progress. Globally, Aegis' high water mark was 21.6%, reached in 2006. He said the group's goal is to achieve slightly better margins each year until it is at or near that level again.

As to the sale of Synovate, Buhlmann said basically he's trading a "low-growth, low-margin business" for media agencies that will perform better and be more synergistic with the company's core offering. The company has targeted 50 to 60 potential "small to medium-sized" acquisitions, primarily in the top 20 markets, that will add to the company's scale. It's focused on acquiring faster-growing digital companies, such as those in the social and mobile sectors.

This year, the company has spent a little over $100 million on 11 acquisitions, such as Australian mobile tech firm Tigerspike.