Sports, Events & Autos Weigh Down Omnicom Q4
Global ad holding giant, Omnicom, reported fourth quarter results yesterday including a 15% drop in profit and 3% reduction in revenue. Omnicom CEO John Wren penned most of the blame on three sectors: automotive, sports/event marketing and recruitment. Despite the loss, organic growth was stronger than expected for the quarter, declining only 6.3% or $211 million.
Like the past two quarters, Events and Sports marketing continued to struggle, down almost 27% organically. Events and Sports falls under CRM, one of six core practices for the company. Meanwhile, Public Relations was off 9.3% in organic revenue.
"I think what the numbers reflect is certainly in the auto sector which Randy [CFO] said there was a decline in and sports and events marketing, any projects related to those industries, we didn’t see come back at all in the fourth quarter," said Wren.
The auto sector represented 11% of Omnicom's revenue in 2009 as compared to 14% in 2008. However, Wren did see signs of life emerging from the U.S. auto sector stating:
"We’re seeing at least domestically in the United States is the auto sector I believe is spending more money. Most likely it’s a war for market share which is going on right now and I think that war will continue well into the first half."
"The fourth quarter was a solid finish to what I think can safely be called the toughest economic period in our firm’s history," Omnicom CFO Randall Weisenburger said.
On the bright side for Omnicom, Bayer AG which had previously been working with some 400+ agencies today announced it has consolidated its $850 million account among Omnicom and WPP.