Omnicom Group Raises Its 2022 Organic Growth Forecast Again
Advertising holding company cited strength in precision marketing, public relations, and commerce and brand consulting
Omnicom Group Inc. again increased its organic growth forecast for the year, as its chief executive said the advertising holding company is “well equipped to handle any economic downturn” even as uncertainty for the ad market lies ahead.
The New York-based company, which owns agencies including BBDO, DDB and TBWA, said it was increasing its organic revenue growth forecast to a range of 8% to 8.5% for 2022, up from an earlier forecast of 6.5% to 7%. Organic revenue growth is a metric that removes the effects of currency fluctuations, acquisitions and disposals.
Omnicom Group reported 7.5% organic revenue growth in the third quarter compared with the period a year earlier. The company said it saw double-digit organic growth in precision marketing, which helps clients reach consumers directly through digital platforms, along with public relations, and commerce and brand consulting.
But experts and onlookers say advertising could take a hit from macroeconomic factors leading into the fourth quarter and 2023.
In late September, Interpublic Group of Cos.’s Magna unit clipped its U.S. advertising growth forecast for 2023, saying a weaker economic environment is likely to cut into spending. The firm said it expects growth of 4.8%, down from a prediction of 5.8% in June.
Morgan Stanley analysts said in a note last week that the ad market is likely to continue decelerating in 2023.
Omnicom Chief Executive John Wren acknowledged the challenges as he discussed the company’s most recent results on a call with analysts Tuesday.
“While we are confident in our forecast, we retain a healthy level of caution due to macro factors, including the ongoing war in Ukraine, the continuing disruption of global supply chains, the economic risk posed by rising interest rates here in the United States and higher inflation around the world,” Mr. Wren said.
Omnicom posted net income of $364.5 million, or $1.77 a share, for the quarter ended Sept. 30, compared with net income of $355.6 million, or $1.65 a share, a year earlier. Revenue was flat compared with a year earlier at $3.44 billion.