Editor’s note: Adweek worked with Matthew Scott Goldstein, a consultant with a deep knowledge of the media industry, to craft his quarterly newsletter into an Adweek article. Through his findings on various industry earnings calls, we’re bringing you insights about how your favorite brands, agencies, media companies, publishers and tech companies are performing on a quarterly basis. His goal was to go past what the trades were focusing on, which mostly revolved around revenue, and tap into the nitty-gritty data shared on these calls.
This iteration focuses specifically on agencies and media companies in the 2019 second quarter.
- Publicis: Revenue is up 1.6% year-over-year, with U.S. revenue flat year-over-year. Bought Epsilon for $3.95 billion. All of the digital growth in the U.S. is actually captured by Facebook and Google. The need for transformation has never been so strong in the sector. Has a model allowing Publicis to address those challenges and invest in the talent and the expertise of the future. Combination of media and creative assets, uniquely positioned to help clients acquire market share at a lower cost. Publicis believes that some clients will continue to reduce their spending in traditional areas, but it is uniquely positioned to help clients with the addressable market of $1.5 trillion. The cut in advertising fees that the business is experiencing mainly with CPG clients (and other categories) in the U.S. is leading to a conservative approach. The significant proportion of ad spend growth is now being driven by small and medium-sized businesses and direct-to-consumer businesses. These are the kinds of businesses that are not using ad agencies. Forecasting the market is going to grow more in 2020, driven by the U.S. elections and the Olympics. Clients are obsessed today with “How can I take back control of my customer?” In a world that is being dominated by the platform, their ability to have a direct relationship with their customers is key.
- Omnicom: Worldwide revenue decreased 3.6%, and the U.S. was up 3.2%. A key takeaway of Cannes was the return to celebrating creativity. Excited about that Annalect launched the people-based precision marketing and insights platform, called Omni. Prefer to rent the right data and technology that can improve agility and client integration at any point in time, rather that invest in legacy data assets and platforms that can easily become obsolete. IP is the ability to bring deep consumer insights to clients in lockstep with brilliant creative ideas driving business results. Investment in data and analytics has been made with the understanding that they are tools in the service of creativity and content. Said no to the recent data company acquisition, just not worth it, wants open and unbiased. Building and investing in the Annalect and Omni platform for the last 10 years. People believe that the U.S. economy continues to perform well. At the same time, they recognize that the U.S. economy has never performed this well for this long at any point in the past, and so at some point you can expect some dips or some changes. Remain cautious—optimistic, but cautious.
- Interpublic Group (IPG): Organic growth of net revenue was 3% in the quarter. In the U.S., organic growth was 0.6%. Clients remain in investment mode when it comes to their engagements. The future of the industry rests on the ability to combine transformative data capabilities with creativity. Acxiom allows marketers get the best out of all their data assets, driving better and more efficient one-to-one connections with consumers at scale. Soft results in China and don’t see a big recovery in China on the horizon. Attended a number of the top-to-tops. Remove silos at IPG. The core competency of Acxiom is being able to target and cleanse the data that clients have within their own companies. Open architecture is a key principle at IPG, where agencies collaborate seamlessly on behalf of shared clients. Confusion is good for agencies, because, if clients are confused, they need someone to figure it out, and that’s what IPG does. Business is going in waves in terms of centralized versus local marketing.