Omnicom PR revenue up slightly in Q1

PR revenue grew 0.2% organically in the period alongside 0.3% growth for the holding company as a whole. Advertising revenues decreased while healthcare work grew significantly.

Omnicom CEO John Wren
Omnicom CEO John Wren

NEW YORK: Omnicom Group’s PR revenue rose 0.2% organically in Q1 to $331.6 million.

The results were measured against Q1 2019, in which revenue dropped 0.5%.

The holding company owns and operates FleishmanHillard, Ketchum, Porter Novelli, Marina Maher Communications and other firms under Omnicom Public Relations Group.

Fleishman president and CEO John Saunders said he is “very happy” with his agency’s performance in Q1. 

“January and February were both excellent, and then everyone at Fleishman showed remarkable resilience in March working from home,” he said. “ So I am thrilled and grateful to all my colleagues for how well and how quickly they all adapted. We also showed just how valuable public relations is to our clients, and we are very grateful to them for all the opportunities.”

Representatives from MMC, Ketchum and Porter Novelli did not immediately respond to inquiries seeking comment. 

Ketchum and Fleishman both began staff reductions and pay cuts last week in response to the pandemic. Omnicom CEO John Wren sent an internal memo to all 70,000 employees of the holding company this month about staff reductions, salary slashes and furloughs at the holding company.  

Fleishman’s 2019 revenue was flat at $606.9 million, according to PRWeek’s Agency Business Report, while Ketchum’s revenue declined 1.95% to $502 million. Porter Novelli saw a 3.65% drop in revenue last year to $145 million, while Marina Maher Communications’ revenue increased by 6% to $53 million.

At the start of this year, former Omnicom PR Group CEO Karen van Bergen moved into the role of dean of Omnicom University, the holding company’s management development program. She was replaced on an interim basis by John Doolittle, president of Omnicom’s DAS Group of Companies, on an interim basis while the network searches for her replacement.

For the holding company as a whole, revenue was up 0.3% organically in the period to $3.4 billion. Net income fell 1.9% to $258.1 million, while operating profit decreased by 2% to $420.2 million. Omnicom’s operating profit margin percentage was 12.3% in the quarter versus 12.4% in Q1 2019.

By business segment, Omnicom’s healthcare work saw the highest growth, up 9.6% organically to $281.3 million in the period, while advertising revenue decreased 0.1% to $1.9 billion. CRM execution and support decreased 0.9% to $318.1 million and CRM consumer experience fell 1.3% to $583.1 million.

U.S. revenue was up 1.7% organically in Q1 to $1.9 billion, and revenue increased by 0.6% in other parts of North America to $103.1 million. The Middle East and Africa saw an organic revenue decrease of 28.4% to $55.5 million. U.K. revenue growth was 3.7% to $345 million, and other European markets were down by 2.3% to $578.4 million. Revenue growth in Asia-Pacific was 2% organically in the period to $359.3 million. Latin America revenue decreased 5% organically to $71.4 million.

Organic revenue represents change without taking into account the impact of acquisitions or disposals.

“While we hope for a swift recovery from the pandemic, we are adjusting our operations quickly to the current environment, continuing to deliver outstanding service to our clients and positioning ourselves for when the market rebounds,” said Wren. He added that the holding company would not be providing any specific financial guidance.  

Wren said he would be “shocked if there’s any depletion” of the talent at Omnicom, explaining that he is “not any more concerned” than he would have been prior to the pandemic.

Omnicom, Wren said, has been communicating with employees and “letting them know what are our priorities and what are our concerns and what to expect our actions to be.” 

“I find that when you do communicate with your employees that way, it creates a dialogue at a trust level that is terribly important to get us through this crisis,” he said on the earnings call. 

Dentsu poached Wendy Clark, global chief executive of Omnicom Group advertising network DDB, this month to be global CEO of Dentsu Aegis Network.  

Wren said the network was "a bit shocked and put off when [Clark] decided that she was going to move on in the middle of a crisis. But we were able to recover with no interruption at all because [Chuck Brymer] was ready to step back in and has done a magnificent job, irrespective of whatever the behavior of his predecessor was."

This story was updated on April 28 with comment from Wren. 

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