|Omnicom has increased its staff incentives back to pre-recession levels.
Omnicom's management had warned late last year that advertiser spending activity linked to the 2004 Summer Olympic games was likely to pull spending from the fourth quarter to the third, but fourth-quarter revenue was up 11% to $2.79 billion and net income grew 12% to $236.5, up 12%.
Staff incentives back up
CEO John Wren said results have improved enough that the company has increased its staff incentives back to pre-recession levels.
Spending in 2004 was strong in the U.S. and Asia while Europe was flat, but the region showed signs of improving in the fourth quarter, said Chief Financial Officer Randall Weisenburger. The U.K., France and the Netherlands are not yet growing, but those markets are stable now, Mr. Wren said.
Clients are bullish
Clients are "bullish" in their 2005 budgets, compared to past years, Mr. Wren said. Some clients are shifting spending from broadcast TV advertising to other activities, but that should have a good effect on Omnicom's margins, he said.
"Instead of money going out to the third party, which would be a TV network, it's being spent on activities which we're more closely participating in," he said.