NEW YORK: Omnicom Group’s PR firms reported an organic revenue decrease of 3.4% in Q3 to $322.8 million.
The percentage drop was down from Q3 2019, when the holding company’s PR revenue fell 3.8% from the previous year.
Omnicom CEO John Wren said the sectors hardest hit by the pandemic include travel and entertainment, as well as Omnicom’s events business. In PR, its firms “had wins with J&J Pharma, New Pen Medical Center and KKI Pharma,” he said.
Omnicom owns and operates PR firms including FleishmanHillard, Ketchum, Mercury, Porter Novelli and Cone.
“Notwithstanding the vagaries of this pandemic, it's reassuring for FleishmanHillard to be part of a group that is managed so well,” Fleishman CEO John Saunders said via email. “Having studied the results today, it is clear that FleishmanHillard is one of the best-performing firms within Omnicom this year, and I am again incredibly grateful to our staff and clients.”
Top executives from Omnicom’s other PR agencies were not immediately available for comment. Omnicom declined further comment beyond its earnings call.
The holding company said on Tuesday that it is planning to end voluntary pay cuts across its firms by the end of the year.
Omnicom’s total revenue dropped 11.7% organically year-over-year to $3.2 billion in Q3. The holding company’s operating profit increased or 5.9% to $501.4 million year-over-year. It also reported net income of $313.3 million, up from $290.2 million last year.
Most of Omnicom’s other business segments reported more severe revenue decreases in the period, barring healthcare, which was up 3.8% to $297.7 million. Advertising was down 11.7% to $1.8 billion, while CRM consumer experience dropped 19.3% to $516.2 million and CRM execution and support fell 19.4% to $276.9 million.
Omnicom’s U.S. operations outperformed other regions, despite a revenue dip of 11.4% to $1.7 billion. U.K. revenue fell by 12.5% to $319.3 million and Asia-Pacific dropped by 12.8% to $370 million. Latin American revenue fell 22.3% organically to $61.6 million, and the Middle East and Africa decreased 21.4% to $45.2 million in Q3.
The holding company has formed a committee to help agency leaders evaluate how business should operate post-COVID “to best serve each agency's specific services, people, client space and culture,” Wren said.
He noted that he “fundamentally believes” Omnicom staffers will return to the office but the company will likely have a “more agile and flexible workforce,” meaning employees will not have to come in five days a week.
The network has learned that it is possible to do things remotely that it would not have thought possible before the pandemic, Wren said, adding that some functions could be moved to lower-cost areas from major cities such as New York.