Omnicom-whose networks include DDB Worldwide, TBWA Worldwide and BBDO Worldwide-posted $135.3 million in net income for the quarter, up 7.3% from last year's period, on $2.03 billion in revenue, a 14.7% increase.
Geographic growth trends were the same as in the rest of the year, with the U.S. market showing growth and the economic recovery still stalled in Europe, said President-CEO John Wren. He noted the U.K. market is showing modest growth, while Continental Europe's decline appears to be easing.
In the U.K., WPP Group-parent of Ogilvy & Mather Worldwide, J. Walter Thompson Co. and Young & Rubicam-reported revenue of $1.72 billion, up 11% from the year-ago period. U.K. companies report earnings twice a year, not on a quarterly basis.
After factoring out the effects of currency and acquisitions, revenue was up 2%, with strong revenue growth in advertising and media buying and specialist communications and flat but improving revenue in public relations. WPP acquired Cordiant Communications Group, parent of Bates Worldwide, on Aug. 1.
Omnicom saw some areas with declining revenues earlier in the year stabilize in the third quarter, including public relations, and recruitment and financial-services advertising, said Chief Financial Officer Randall Weisenburger. After several quarters of dropping revenue, Omnicom's public relations posted a 5.2% increase, which helped it turn positive, up 1.8% for the first nine months of the year.
WPP Chief Executive Martin Sorrell noted business-to-business spending, a persistently weak area, shows evidence of firming, and technology and telecommunications advertising is stronger. Many advertisers who were focused on cutting costs have shifted gears to growing revenue, and advertising is key to that, he said.
no `grand turnaround'
Mr. Wren noted that, while account review activity had been depressed for the last eight months, it has picked up significantly in the last 30 days. It's not a sign of "a grand turnaround in client spending," but it is a good indicator for the next year, he said.
Additionally, both companies also reported employment appears to have stabilized, thanks to the increased client activity. Mr. Sorrell said WPP's rate of staff reductions has flattened.
While Omnicom still cut some jobs overseas in the third quarter, Mr. Wren said there aren't any major staff reductions in the offing at the moment, adding, "Since most of our businesses are either growing or stabilizing, there aren't the level of discussions we've had at various points in the last three years about major adjustments in any part of our business."