Buoyed by client spending on the Olympic Games and strong performance by nontraditional marketing services, Omnicom Group, the largest advertising holding company, reported net income was up 17% for the third quarter. Omnicom, parent of BBDO Worldwide and DDB Worldwide, posted $145.3 million in net income, vs. $124.6 million for the same period last year. Revenue rose 14% to $2.3 billion.
Growth reported globally
All its major geographical regions experienced growth, though the U.K. lagged a bit. For the quarter, the U.K.'s revenues grew 12.2% while its year-to-date growth is nearly 16%. By discipline, the company experienced the strongest growth in marketing services such as CRM, public relations and specialty communications.
Meanwhile, No. 2 WPP Group reported revenues rose 4% in the third quarter to $1.9 billion compared with the year-ago period. Factoring out currency fluctuations -- namely a weak U.S. dollar -- WPP's revenues rose 11.9%. (WPP reports income every six months.)
Asia/Pacific, Latin America, and Africa and the Middle East saw the largest rise in revenue, up 22.4% from the year-ago period, while U.K. and Europe delivered a 18.9% increase. In North America, revenues rose by 10.4%.
Performance by sector
WPP's strongest-performing sector was information, insight and consultantcy, up 18.3%, followed by branding and identity, health care and specialist communications, up 13.5%. Advertising and media investment management was up 9.3%, while PR and public affairs increased 8.6%.
In a conference call, Omnicom executives were optimistic for the remainder of the year with the holiday season approaching and a few acquisitions potentially in the offing. However, the close presidential election is throwing some uncertainty over spending during the final part of the year, as marketers have been slow to give approval for fourth-quarter discretionary projects amid an uncertain political landscape.
Awaiting election results
"The base business is strong," said Omnicom president-CEO John Wren. "But this election is so close nobody knows what to expect. Until the marketplace clears, we won't have much certainty."
Mr. Wren characterized the discretionary spending in question as "incremental."
Wpp management said the current results highlight a continuing growth trend, as the third quarter marks the "highest like-for-like quarterly growth since the first quarter fo 2001." WPP reported new-business billings of $427 million for the quarter and $3.2 billion for the first nine months. In a press release, the company said "new-business activity and the conversion rate is running at an unprecedented level."