NEW YORK: Omnicom Group CEO John Wren said on the holding company’s second-quarter earnings call last Thursday that it is "adjusting some of the leadership" in its PR firms after a disappointing Q2.
The group’s PR firms experienced an organic revenue drop of 0.3% in the second quarter to $342.6 million. On the earnings call on Thursday, Wren said the performance of Omnicom’s PR, shopper marketing, and branding businesses "dragged down" the holding company’s Q2 performance.
"In PR what we're doing is adjusting some of the leadership--typically you can take our people and you can see that we have hunters and farmers; sometimes we get too many farmers in a place," Wren said on the earnings call, according to a SeekingAlpha transcript. "We’ve got to grab a few new hunters to start the place up. So these are all actionable areas. I can’t promise you the day or the week that it’s going to be fixed, but it’s been identified and there are people working on it currently."
PR was the only Omnicom segment that saw an organic revenue decrease in the period. Advertising was up 4.2% organically to $2 billion; CRM increased 3.7% to $1.1 billion; and specialty communications was up 2.2% to $297.8 million. The holding company’s overall organic growth was 3.5% in the period to $3.8 billion.
For the first half of the year, the PR group reported a 0.7% increase in organic revenue to $667.9 million.
Asked for clarification on Wren’s comments, Joanne Trout, Omnicom SVP of global communications, said via email, "There isn’t much more to say other than: We always seek a balance between hunters and farmers within our PR agencies."
Wren was not immediately available for additional comment.
The holding company owns and operates firms including FleishmanHillard, Ketchum, Porter Novelli, Marina Maher Communications, and Portland Communications within the Omnicom Public Relations Group. The CEOs of Fleishman, Ketchum, Porter, and Marina Maher each deferred to Trout’s statement, as did Omnicom PR Group CEO Karen van Bergen. DAS chairman and CEO Dale Adams was not immediately available for comment.
The chief executives of Omnicom’s three largest agencies all reported positive momentum in 2016 for PRWeek’s Agency Business Report. Fleishman president and CEO John Saunders said his firm delivered its best year of performance in 2016 "by some distance," including 21 new assignments worth more than $1 million each and a 76% new business close rate. Marina Maher Communications did not disclose specific revenue numbers, but CEO Marina Maher said MMC had "one of our best years ever" in 2016, surpassing growth projections by double digits. Ketchum CEO Rob Flaherty, meanwhile, said that his firm saw solid growth across existing clients and a record new business year in 2016.
U.K.-based Portland saw revenue growth of more than 20% to more than $39 million globally.
In September 2016, Porter Novelli lost its largest global account of more than 28 years, a $14 million product and corporate comms remit for HP it had handled with FleishmanHillard. By the end of the year, HP had moved all of its PC and printers business over to Edelman. The firm had recovered 75% of the lost revenue less than three months later and had clawed back "all of it and more" by the end of the first two months of 2017, Porter CEO Brad MacAfee said this spring.
