At Giant Ad Companies, Down 6 Percent Is the New Flat
It’s now conventional wisdom to expect advertising declines of 20 percent or more as the big media companies deliver this season’s earnings reports. But the giant ad holding companies that make and place those ads aren’t getting beaten up quite as badly. And they’re all delivering remarkably similar results.
Yesterday, for instance, Omnicom (OMC) reported that “organic revenue”–an accounting term that factors out wildcards like currency fluctuation and acquisitions–dropped 6.6 percent in the last quarter.
Not mentioned in WPP’s three-month update: Any info about its sensational lawsuit against ad start-up Spot Runner, which it accuses of being a privately held pump-and-dump scheme. While the Spot Runner imbroglio is sexy, it has no impact on the company’s top or bottom lines.
But Omnicom management made hopeful noises yesterday about a recovery that might appear by the end of the year, and WPP has the same supercautious optimism: “The first half of 2009 will clearly be very difficult, with the second half, although continuing to be tough, likely to improve relatively. Any recovery, of sorts, will probably come in 2010.” Small comfort, but I’ll take it.