Publicis and Omnicom: media emerges as growth engine

Media activity appears to be the engine behind the growth at two of the largest holding companies, Publicis and Omnicom, based on their Q1 results.

The results saw a shift in the revenue league table, with Publicis overtaking Omnicom to claim the second spot (after WPP, which is the largest, even if its market cap has shrunk somewhat).

Why it matters

Publicis and Omnicom’s relative strength in media echoes a similar story from WPP’s most recent results. The conclusion, then, is that media spending continues to be relatively strong, despite declines in the broader market.

Lapping Q1 '22, which was broadly quite positive for Publicis, meant that growth rates compared to the same time last year appear to have slowed. A notable exception, however, is Epsilon, one of the firm's brands; its first-party data offer has grown in line with the wider company but much faster than a year ago.

Omnicom, too, posted outsized growth in precision marketing, way ahead of the overall company, a trend that chimes with some of the signals emerging from the retail media boom.

Publicis

Net revenues grew 10% vs Q1 '22, 7.1% on an organic basis (excluding currency or acquisition fluctuations) to reach $3.7bn for the quarter. In 2022, the company brought in $14.9bn.

This has been part of a longer transition – or transformation – that the company measures from 2019; since then, revenues have grown 45%. The company credits Epsilon, a first-party loyalty and CRM company that it acquired for $4.4bn back in 2019).

Growth sources year on year:

• Publicis (whole company) 10%
• Sapient 11%
• Epsilon 10%

CEO Arthur Sadoun tells Campaign that each of these talk to the “two biggest shifts in our industry”: the shift away from cookies to first-party data (Epsilon) and digital transformation (Sapient), both services in high demand. Clients are not yet cutting budgets, he added, but some of the more ambitious projects have been delayed.

Across the regions, Publicis generally finds that its creative business is stable, while media activities have provided more of the boost for growth.  

Omnicom

Now the third largest holding company by revenue, Omnicom – owner of agency networks BBDO, DDB, and TBWA – posted 5.2% organic revenue growth in Q1 to reach $3.4bn. In 2022, the company brought in a total of $14.3bn.

While growth was relatively even across the board, the strongest contributors to organic growth were experiential marketing (8.4%), precision marketing (7%), media buying (5.1% in combination with advertising activities, together worth over half of the business), and public relations (5.8%).  

The strength of media, which along with advertising makes up over half of Omnicom revenues, is further bolstered by precision marketing that accounts for 10% of company revenues.

Sourced from Publicis, Omnicom, WARC, Campaign