Omnicom reports fourth consecutive year-over-year quarterly decline in PR revenues

NEW YORK: Omnicom Group today reported a 18.5% decrease in its second quarter PR revenues, dropping to $271.7 million versus $322 million in Q2 2008. Year-to-date, PR revenue fell 18% to $531.8 million from $627.5 million year-over-year.

NEW YORK: Omnicom Group today reported a 18.5% decrease in its second quarter PR revenues, dropping to $271.7 million versus $322 million in Q2 2008. Year-to-date, PR revenue fell 18% to $531.8 million from $627.5 million year-over-year.

Its agencies include Fleishman-Hillard, Ketchum, Porter Novelli, Cone, Brodeur, and Kreab & Gavin Anderson, among others.

The last time Omnicom's PR revenues posted a year-over-year quarterly increase was in the second quarter of 2008 when it brought in $333.4 million in revenues, a 3.7% increase. The last three quarters also resulted in year-over-year PR revenue declines, including a 17.4% decrease last quarter.

The discipline's contribution to the holding company's revenues has held steady in general. It makes up 9.5% of revenues, similar to the 9.6% it contributed in Q2 last year. In comparison, advertising makes up almost 45% of Omnicom's revenues. The ad discipline also experienced losses. Its revenues totaled about $1.3 billion, a 15.5% year-over-year decline.

Global revenue for Omnicom Group was $2.9 billion in the second quarter, which ended June 30, a 17.4% decline from the year ago period when its sales totaled $3.5 billion. Net income for second quarter was $233.4 million, a 24% year-over-year decrease.

Year to date, Omnicom earned about $398 million in net income on global revenues of $5.6 billion. That's a 15.8% year-over-year decrease in revenues, and a 23% decline in income.

During the earnings call, Omnicom EVP and CFO, Randall Weisenburger, attributed a great deal of the company's year-over-year declines to a few specialty areas. He said recruitment marketing was down almost 45% for the quarter; the auto sector was down 30% organically, further disrupted by the Chrysler bankruptcy; events and sports marketing was down almost 40% organically; and not-for-profit marketing was down 40% in the quarter.

Organic growth companywide declined 10.8% in the second quarter, “about $50 million more than anticipated going into the quarter,” said Weisenburger.

“The revenue decline in the second quarter was slightly greater than we had anticipated,” said John Wren, Omnicom president and CEO, during the earnings call. Both Weisenburger and Wren maintained that the company has done well adjusting to the economic recession.

Moreover, they both said that they believed that the losses will begin to decrease.

“These reductions will take some time to recover,” said Wren. “I believe that the top-line pressure has stabilized. And while top-line growth will still take several quarters to achieve, we expect modest economic growth going into 2010 and new business activity will benefit the company.”

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