Omnicom Posts 6.5% Organic Growth For The Third Quarter

Omnicom reported a 7.4% gain in revenue for the third quarter to more than $3.7 billion, with a 24.4% net income gain to $243.8 million. However, in the third quarter of 2013, the company took a charge against earnings of $28.1 million related to costs of the proposed merger with Publicis Groupe that was called off in May. Excluding the impact of those charges, net income would have been up 12%.

The company posted healthy organic growth for the period -- 6.5% -- with a particularly strong per performance in North America, where organic growth was nearly 9%.

The company said that Europe remained soft due to continuing economic turmoil in the Euro Zone. Organic growth in Europe was 2.2%. The Asia-Pacific region posted 4.4% growth and Latin America posted 2.2%.

“Our results were broadly positive across disciple and geography,” said Omnicom CEO John Wren, commenting on a conference call with analysts Tuesday morning.



Wren noted the “huge opportunity” that the growing business of programmatic buying presents to the company, but stressed that it is “still small today.” He said that programmatic contributed 1.5% of the organic growth achieved in the third quarter and that the business was less than 2% of the company’s current revenue.

There has a been a “meaningful increase” in demand for programmatic buying services, Wren said, noting that the company has executed programmatic buys in 30 markets for more than 1,000 advertisers since the fourth quarter of 2013.

Wren also touched on the company’s growing data and analytics business, Annalect, which now includes 1,500 staffers. Deals with and Facebook give the holding company access to first-party data that helps marketers with their targeting, customization and measurement efforts as they shift from “mass marketing to mass personalization” strategies.

That strategic shift is having an impact on client usage and attitude toward the TV medium, said Wren. In previous upfront and scatter markets, he noted, there was an “urgency” on the part of clients to get in certain programs. This year, he added, “that urgency wasn’t there.” And scatter dollars, he added, “are being diverted into other areas.”

For the first nine months of the year, revenue is up almost 6% to $11.1 billion with organic growth of 5.6%. Net income is up 12% to $860.1 million. 

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