Omnicom posts upbeat second-quarter results

Omnicom Group has posted a 4.2% year-on-year rise in net income for the second quarter of 2010, outstripping market predictions and prompting president and chief executive John Wren to talk about growth.

John Wren: president and chief executive of Omnicom Group
John Wren: president and chief executive of Omnicom Group

The owner of creative agencies TBWA and DDB, and media networks OMD and PHD, posted second-quarter profits of $243.3m (£158.9m), up from $233.4m (£152.6m) the previous year.

Results were boosted by new business wins including General Motors (Chevrolet), Kraft and healthcare brand, Humana.

In a call with analysts, Wren said economic growth was "improving, although slowly". He said Omnicom was now beginning to see "increases in the scope of services [clients] require... Last year the focus was survival, this year it's growth".

Worldwide revenue at the group increased 5.9% to $3.04bn, up from $2.87bn in the second quarter of 2009.

Domestic revenue increased 7.4% to $1.63bn, and international revenue rose 4.3% to $1.4bn.

The results feed the mood of general optimism in the growth of the advertising market, compared to the downturn experienced last year.

Earlier this week, rival media network ZenithOptimedia increased its forecast for global ad expenditure growth from 2.2% to 3.5% during 2010, and stated it was not expecting a "double-dip" recession, but was "still cautious" about the market.

Prior to that prediction, Sir Martin Sorrell's WPP Group released a trading update at the end of last month that indicated a revenue rise of 1.8%.

The only results to indicate a downturn over the coming months were released as part of the "industry barometer" Bellwether report, which predicted that marketing budgets would increase at a slower rate than expected during 2010.

Its findings suggested that in the UK during the second quarter of the year, total marketing spend fell by 4.6%, against a 4.5% rise in the first quarter.

Picture credit: Nigel Parry