Omnicom shows revenue growth, but Europe at risk

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Omnicom shows revenue growth, but Europe at risk
Omnicom shows revenue growth, but Europe at risk

Omnicom reported $204.6 million in net income for Q1 2012, a 1.3% increase from the same period last year, said John Wren, Omnicom's president and CEO, during an earnings call. Wren also emphasized Omnicom's initiative to grow its digital presence across all of its agencies through acquisitions, partnerships and investments in personnel.

Omnicom's growth largely came from the US, which showed 4.0% revenue growth to $1.72 billion in Q1 2012 compared to the same period last year. By contrast, Euro-currency markets decreased 5.2% to $547.6 million.

“We're cautiously optimistic on revenue. The region most at risk is Europe, however major economies outside of Europe are steadily improving,” Wren said. Overall, international revenue increased 5.9% to $1.59 billion.

Advertising, which represents 46.9% of revenue, brought in $1.55 billion, an 8.3% increase from Q1 2011. CRM revenue for Q1 increased 2.4% to $1.2 billion. Their PR discipline also showed improvements for the first time in several quarters, a 6.5% increase to about $307 million in Q1 2012, Wren said.

Omnicom will continue its multi-pronged digital strategy, which is why the holding company is investing “significantly” in people to broaden the company's capabilities and service offerings, Wren said.

Omnicom has also employed an “open source technology approach,” which allows it to partner with technology leaders to ensure the company has access to the latest innovations and information in the market place, Wren said.

“The partnerships allow us to integrate the most effective digital strategies within clients' overall marketing plans,” Wren explained.

In expanding its digital capabilities, Omnicom has also made several acquisitions. Yesterday it announced the acquisition of NIM Digital, a Chinese digital agency specializing in media planning and buying, search and digital production services.

NIM Digital adds to the three acquisitions Omnicom made in Q1, including Medical Intelligence (MCI), a Japanese online market research and CRM solutions company for the medical and pharmaceuticals industries; Russian public relations firm Fleishman-Hillard Vanguard; and Australian retail marketing agency Channel 5 Communications.    

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