Both Havas and Publicis Groupe posted negative organic growth (or revenue growth after factoring out acquisitions and the effects of currency fluctuations) but each noted the drops were smaller than in previous quarters and the key North American region appears on the verge of showing positive numbers.
Havas, parent of advertising networks Euro RSCG and Arnold Worldwide, posted $434.2 million in revenue, down 19.8% or a drop of 5.8% on an organic basis. Publicis, which owns networks including Saatchi & Saatchi and Leo Burnett Worldwide, posted $977.4 million in revenue, up 57.1%. The increase was mainly due to the acquisition of Bcom3 Group last September; on an organic basis, revenue dropped 1.2%
French companies report earnings numbers twice a year, not on a quarterly basis.
"All the fears about the Iraqi war are over. ... We're more optimistic about the evolution of our environment, so consequently, we're more optimistic about our own evolution," said Alain de Pouzilhac, chairman-CEO of Havas.
Positive signs in U.S.
The war slowed down the U.S. market slightly in March, hindering what looked like an improving trend, said Maurice Levy, chairman-CEO of Publicis. Both CEOs noted the industry is showing positive signs in the U.S., including an improving consumer mood and signs that marketers are willing to spend on advertising.
Havas' North American revenue dropped 2.6% on an organic basis, while Publicis' was down 0.8%. The companies reported that traditional advertising gains in the U.S. were offset by continued weakness in marketing services, mainly in the public relations and consumer relationship management disciplines, which remained weak but are improving.
Recovery remains tentative
But Havas' president and chief operating officer, Bob Schmetterer, warned the U.S. recovery remains tentative and depends on continued improvement in corporate earnings. And European markets remain "in relatively bad shape," Mr. Levy said.
Havas showed a 10% drop in European revenue on an organic basis, while Publicis posted a 5.2% drop. The U.K., France, Germany, Spain and Italy are showing continued weakness, although traditional advertising and media has proved resilient in some markets.