Bucking the gloom of the world ad scene, advertising and marketing conglomerate Omnicom reported Q1 net income up by nearly twenty percent.
This increased from $79.7 million in the same period last year to $95.3 million, while earnings per share rose from 45 cents to 52 cents. The board also restated its guidance of 12% to 14% organic revenue growth for 2001 as a whole.
An 18.5% increase in marketing services income boosted total revenue growth to 16%, $1.6 billion, with marketing services outstripping traditional advertising's 13.2% growth. The bull-run in marketing services was led by healthcare advertising (+21.4%) and CRM (+19.9%), the latter embracing direct and promotional marketing.
US domestic revenues rose 25% to $896.6m, up from $717.4m in 2000; while international sales increased by a modest 6% to $704.5m ($661.6m), held back by foreign exchange rate fluctuations for which a nine percent adjustment was made.
However, the first portents of a slowdown were reflected in organic growth which dipped to 13.8% from 14.8% in the same period last year.
Warned chairman-ceo John Wren: “Coming into the second quarter, we continue to win business, but there appears to be fewer and fewer accounts that are in review. Going through the trauma of changing your marketing or advertising partner is not [a client’s] first priority in this kind of environment.”
Nevertheless, the group generated $1.3 billion in net new business during the quarter, hauling-in clients of the ilk of Dell Computer and Goodyear Tire & Rubber.
News source: Advertising Age - Daily Deadline