Omnicom's marketing services revenue up 5% in Q2

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Omnicom Group's second-quarter marketing services revenue grew 5% organically, compared with the prior year, to $1.9 billion, the company said July 19. The holding company's overall revenue reached $3.5 billion for the quarter, up 15% compared with the prior year.

“Brand advertising accounted for 46% of our revenue and marketing services [accounted for] 64%,” said Randall Weisenburger, CFO and EVP of Omnicom, during an earnings call. Omnicom's marketing services business includes its CRM, PR and specialty marketing firms. The holding company owns advertising agency networks including BBDO Worldwide, DDB Worldwide Communications Group and TBWA Worldwide. Its roster of direct and digital agencies includes Rapp, Proximity Worldwide and Organic.

Omnicom's specialty marketing revenue fell 1% organically to $307.7 million. Its CRM business generated $1.2 billion in revenue in the quarter, growing organically by 8% year-over-year. Second-quarter advertising revenue increased 10% organically from the prior year to $1.6 billion.

Organic revenue growth represents change in revenue in constant currency without measuring the impact of acquisitions or disposals.

The company's net income in the quarter grew 13% year-over-year to $275.1 million. Revenue from the holding company's US business generated 51% of overall revenue at $1.8 billion.

Weisenburger said that the company received “just over” $1 billion in net new business wins in the quarter.

Asked during the earnings call what share of Omnicom's earnings can be attributed to digital advertising, CEO John Wren said all of the company's work features digital components.

“If you look at any of the campaigns that have been worked on for our major clients, you'll find that there's a significant digital as well as traditional component to both,” he said. “Our attitude all along has been to offer separate specialty services in digital to the extent that clients want to buy it that way, but our belief is that all of our services are digital and will become digital.”

After buying four companies in the previous quarter, Omnicom only acquired communications consultancy Synergy, which will operate within the DDB Health group of businesses, in Q2. Wren said that he expects the company's acquisition activity “to pick up in the second half of the year.”


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