NEW YORK: PR revenues at Omnicom Group were down 15% in the third quarter, which ended September 30. The holding company reported total PR revenues of $266 million. Year to date, its PR firms have earned revenues of $798 million, about a 17% year-over-year decline.
Omnicom's PR firms include Fleishman-Hillard, Porter Novelli, Ketchum, Cone, Kreab Gavin Anderson, and Brodeur, among others.
The decrease follows a similar pattern of declining PR revenues since the recession really took hold last year. In Q2, Omnicom's PR revenues fell 18.5% from the year-ago number. Advertising revenues took a smaller hit this quarter, falling 11.6% in Q3 to $1.2 billion.
Omnicom CEO John Wren stressed a message of returned stability in client spend during the October 21 earnings call, despite company-wide declining global revenues and profits in the third quarter for the New York-based holding company.
“I think we're steadily seeing stabilization,” he said. “In the beginning of the year there was significant reductions in budgets. And then, there were a great deal of conversations about the reductions in scope of work that we needed in order to satisfy the clients. That was the first quarter. That started to stabilize in the second quarter and continued to stabilize through the third quarter."
In Q3 Omnicom Group earned $165.6 million in net income on revenues of $2.84 billion. That equals a more than 22% drop in income, and a 14% drop in revenues. Wren called the results in line with the firm's expectations and to “expect more acquisition activity from us,” including “sensibly-priced digital options."
Though analysts said results met expectations, one analyst that follows Omnicom, told PRWeek that it's important to note these are recently lowered expectations. The source, which declined to be named, added that the holding company likely hasn't seen an uptick in client spend yet.
“Marketers are still pretty cautious,” the analyst said. “Any spending that does happen is going to be much more targeted and require more ROI than in the past.”
Year to date, Omnicom reported $563.5 million in net income, down from $729.3 million in the year-ago period. Revenues for the first nine months of the year were $8.45 billion, down 15% from the year before.
The US continues to make up the bulk of Omnicom's revenues at about $1.5 billion, compared to $1.35 billion in international. US revenues were down about 13% from the year ago period.
Updated October 23, 2009, 11:14am