Essential First-Quarter Stats for Agencies and Media Companies

The ups and downs of various industry leaders

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How agencies and media companies performed in Q1 2019. Pixabay
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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 first quarter.

Yellow background with thin white lines intersecting and white outlined dollars bills to the left. Text reads: Agencies.
  • Publicis: First Quarter 2019 net revenue was up 1.7%. North America net revenue in the first quarter of 2019 was broadly flat. Ranked first in New Business Wins in 2018, and the largest ones are starting to ramp up in the second quarter. This Epsilon acquisition will accelerate the implementation of the strategy to become clients’ preferred partner in their transformations. Epsilon, which brings a data trove of around 160 million individual clients, generated revenue of $1.9 billion last year, almost entirely in the United States. Epsilon currently gets 97% of its revenue from the U.S., while Publicis derives 54% of sales from North America. Publicis along with Epsilon will offer the most compelling suites of services, fully aligned with client needs. Together, they will be perfectly positioned to accelerate on growth and gain market share in an enlarged $1.5 trillion addressable market. Epsilon has 9,000 employees, with 3,700 data scientists and 2,000 delivery experts based in India brought together by what is clearly an outstanding management team. Identity data from more than 250 million consumers in the U.S.
  • Omnicom: Worldwide revenue fell by 4.4%, to just under $3.5 billion. Has 5,000 clients in more than 100 countries. The results continue to demonstrate the consistency and diversity of Omnicom’s operations, the ability to deliver consumer-centric strategic business solutions to clients and best-in-industry creative talent. The U.S. was up 2% in the quarter, driven by strong performance in advertising and media, healthcare and precision marketing group, offset by the decline in events business, further consolidated data and analytics and technology services and investments at Annalect. There will be more regulation around privacy in U.S. That’s nearly inevitable with the comments made by a number of people in the industry; legislation is going to happen in the U.S. Omnicom did a deep audit of all of the assets, looking at all of the different data providers and partners and came up with policies and procedures.
  • Interpublic: Total revenue of $2.36 billion in the first quarter of 2019 increased 8.9% compared to the same period in 2018. The impact of net acquisitions was positive 9.4%, and the resulting organic net revenue increase (which excludes results from Acxiom) was 6.4%. This was composed of an organic net increase of 5.7% in the U.S. and 7.7% internationally, attributable to a combination of net client wins and net higher spending from existing clients. Results were driven by strong top- and bottom-line performance in media, as well as growth from global creative networks, public relations and digital offerings. With Acxiom, the company has also significantly strengthened position as it relates to helping clients succeed in a world where data-driven marketing solutions are core to brands’ success. At quarter end, total headcount was approximately 54,000, an increase of 7.8% from a year ago, with more than half of the increase due to the addition of Acxiom and the balance due to the many growing areas of the portfolio. While there is still macro uncertainty, the company continues to believe that economic fundamentals are sound, especially in the U.S. Operate in a media landscape that evolves at a rapid pace. Media channels continue to fragment, and clients face an increasingly complex consumer environment, in which data which fuels the digital economy is central to most contemporary media offerings and marketing capabilities. To address today’s marketplace, acquired Acxiom, adding a foundational world-class data asset.
  • WPP: Reported revenue up 0.9% year-over-year. First quarter trading update reflects the impact of certain significant client losses in 2018, particularly in the United States. Although WPP faced a challenging year, especially in the first half, the business is encouraged by how well people, agencies and clients are responding to new strategic direction. Expectations for the full year are unchanged. It will take time to address the company’s legacy issues, but committed to taking all the actions necessary to position WPP for future success. Continued progress in implementing three-year turnaround plan. Key 2019 priority is to address USA growth, and WPP remains committed to taking all actions necessary to position WPP for future success. North America like-for-like revenue less pass-through costs -8.5%, weakest performing region, although in line with budgets, because of continued pressure and impact of automotive, pharmaceutical, FMCG assignments lost in 2018. New strategy resonating well with clients. Solid new business performance and client stability. Strengthening team and leadership. Technology: partnership with Adobe, Microsoft and SAP on the Open Data Initiative. Continuing progress on disposal of Kantar and restructuring on track
Yellow background with thin white lines intersecting and white outlined dollars bills to the left. Text reads: Media Companies.

Matthew Scott Goldstein is a versatile and hands-on, data-driven consultant with deep knowledge of the media business.