There’s a glimmer of light at the end of the tunnel for the agency business—and it could start to be seen in the second quarter.
That’s one big takeaway from Omnicom Group’s earnings today that showed the continuing impact of the pandemic on its business. The company reported a 9.3% falloff in worldwide revenue in the fourth quarter of last year to $3.76 billion, and an 11.9% drop for the full year to $13.2 billion, compared to 2019.
Organic growth for the quarter fell 9.4% in the U.S., the sharpest drop excluding the U.K., which was down 12.4%, and the Middle East and Africa, which plunged 36.8%. For the full year, organic growth slid 10% in the U.S.
But while the first quarter was far from rosy, Omnicom CEO John Wren predicted a second-quarter rebound in a call with analysts: “We fully expect to return to positive organic growth in the second quarter and the balance of the year.”
Hardest hit among Omnicom’s disciplines for organic growth in the quarter was consumer experience, which decreased 15.8%, attributed by the company to a dearth of events due to COVID. Events, said Phil Angelastro, exec VP and chief financial officer, account for 3.5% to 4% of Omnicom’s total business.
Among its other areas of practice, customer relationship management execution and support was down 13.7%; PR, buoyed by the election, was up marginally at 0.2%; while health care—generally an area of growth for rivals—fell 2%. Advertising, which was down 9.7%, clocked in with a better number for the quarter than the full year, when it dropped 12.2%.