While it’s hard to foresee the company’s full-year performance at this point in the pandemic, Omnicom CEO John Wren said Tuesday one thing is clear: “Every aspect of our business is going to change,” coming out of the crisis.
That’s part of the reason Wren has established committees on media, advertising and public relations to evaluate future business models for those sectors. “I’m looking for dramatic answers and goals and objectives to accomplish,” said Wren, on how those businesses should be performed in the future.
Like other holding company’s Omnicom has set up a task force to devise a phased-in return to operations once shut-down orders have been lifted. And that task force will also focus in part on new models given how effective the company’s 80,000-plus work force has performed serving clients remotely, which Wren termed “amazing.”
He noted some of the tools that are key to WFH productivity such as FaceTime, MicrosoftTeams and even drones.
While it’s still early in the process, Wren said that its possible large parts of the production and post-production processes—as they existed pre-pandemic may be “collapsed,” in the future to speed delivery of work to clients. “They delay the process compared to what’s going on now,” he said.
Wren’s comments came during a conference call to discuss first quarter results and the impact of COVID-19 on the business.
Reported revenues for the period were down 1.8% to $3.4 billion. Organic revenue growth was 0.3% which Wren said he was “proud of” under the circumstances. The U.S. was up 1.7%. The UK and APAC regions also posted some growth while most other regions were in the negative column.
Wren and CFO Phil Angelastro who was also on the call estimated that growth was about 3% through January and February with most of that gain erased in March when the impact of the crisis kicked in.
The full brunt of the pandemic and client cutbacks will be felt in Q2 when revenue declines will likely be in double digits the executives said. Second half declines are not expected to be as severe as the economy slowly opens up again.
The company has previously outlined steps taken to bolster liquidity, balance sheet and cash position as well as steps to offset revenue drops with cut costs including hiring freezes, voluntary salary reductions, furloughs and layoffs.
When asked to put a number on the company’s cost-cutting target—Publicis Groupe has said it’s targeting $500 million for example—Wren replied doing so would be “foolish.” Those big overarching targets announced by others may not even be totally related to COVID-19, Wren opined.
“There’s no number to cheer about,” he said. “We’re not setting a goal [but instead] we’re thoughtfully looking at it client by client and office by office.” Events and field marketing businesses have been hit the hardest, Wren noted. But the company’s healthcare business was up nearly 10% in the quarter.
Categories like pharmaceuticals, technology and telecom are performing well to date, Wren said, while travel, some entertainment and energy clients have cut back sharply.
“It’s not all doom and gloom,” said Wren, adding that lessons learned from the crisis will make the company stronger in the future. “And we were pretty strong already.”