Omnicom PR revenue up nearly 5% in third quarter

Omnicom Group's PR revenue grew 4.6% organically in the third quarter to $332.5 million, compared with the previous year.

NEW YORK: Omnicom Group's PR revenue grew 4.6% organically in the third quarter to $332.5 million, compared with the previous year.

That rate represented a significant improvement on the previous year's growth, when PR revenue was down 0.3% organically in the third quarter of 2012.

The PR agencies owned and operated by Omnicom include FleishmanHillard, Ketchum, Porter Novelli, Cone, Marina Maher Communications, Mercury Public Affairs, and London-based Portland.

The holding company is planning to merge with Paris-based Publicis Groupe, in a move that would create the world's largest marketing and advertising services company. If approved by shareholders and regulators in dozens of countries, the resulting umbrella group would be called Publicis Omnicom Group.

In Q3, the PR segment's performance was bested by Omnicom's specialty firms and advertising agencies, which reported 8.3% and 4.8% organic growth, respectively. PR made up 9.5% of the holding company's business in the period, while advertising accounted for 47.1%, CRM made up 36.4%, and specialty marketing earned 7% of the total.

For the first nine months of the year, Omnicom's PR agencies reported 3.4% organic growth to $987 million, compared with the first three quarters of 2012. Omnicom's advertising segment saw 5% organic revenue growth to $5.1 billion, while specialty marketing reported a 5.7% organic increase to $785 million. CRM revenue increased 0.4% organically to about $3.7 billion in the first three quarters of the year.

Reached for comment, FleishmanHillard president and CEO Dave Senay said his firm had an “exceptionally strong quarter.”

Ketchum senior partner and CEO Rob Flaherty noted that his agency experienced “double-digit positive revenue growth,” noting major wins including Welch's, Sarah Cannon Research Institute, and Covidien. The firm hired 132 staffers in the third quarter, he added. 

“We're firing on all cylinders. There are a lot of good things going for us,” Flaherty said. “In addition to new talent and strong current talent, we have a strong new business record and [are experiencing] incremental growth on current accounts.”

Marina Maher, CEO of the eponymous firm, said that “we set an ambitious plan for this year and are so thrilled to be exceeding it. Both our consumer and healthcare practice have had significant gains.” 

Porter Novelli CEO Karen van Bergen said her agency “had another healthy quarter in Q3, continuing our positive 2013 performance,” adding that key new business wins included Durex, Treo Solutions, and the John Theurer Cancer Center.

“We anticipate that this trajectory will continue through the close of the year, and once again are very pleased that Porter Novelli's growth year-over-year is contributing to the overall upward trend in Omnicom's PR business,” she said. 

Overall, the holding company reported a 4.1% organic increase in global revenue to $3.5 billion in Q3. For the year to date, Omnicom earned $10.5 billion in revenue, representing a 3.2% organic revenue increase compared with the prior year. Operating income was down 2% organically compared with Q3 2012 to $379.4 million, while net income dipped 3.9% to $196 million.

The holding company saw overall US organic revenue growth of 5% in the third quarter, year-over-year, to $1.8 billion. It reported a 1.6% organic revenue decrease in Euro currency markets to $551.9 million, 7.5% organic growth in the UK to $327.6 million, and 4.5% organic growth in the rest of the world to $795.5 million.

In the first nine months of the year, Omnicom's US revenue was up 3.9% organically, compared with the prior year, to $5.5 billion. UK revenue jumped 5.9% organically to $957.5 million, while the holding company saw a 5% increase in the rest of the world to $2.4 billion for that period. Revenue in Euro currency markets was down 2.8% to $1.64 billion.

This story was updated on October 15 with comment from Omnicom PR agency CEOs. It was updated again on October 16 with comments from van Bergen.

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