WPP, Omnicom PR Operations Report Double-Digit Growth
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WPP, Omnicom PR Operations Report Double-Digit Growth

Public relations revenues at Omnicom and WPP Group—the two largest communications and public relations holding companies—saw double digit growth in the third quarter of 2006, underscoring a return to robust health for the public relations sector.

Paul Holmes

LONDON and NEW YORK—Public relations revenues at Omnicom and WPP Group—the two largest communications and public relations holding companies—saw double digit growth in the third quarter of 2006, underscoring a return to robust health for the public relations sector.

Public relations revenues at WPP—parent company of Burson-Marsteller, Cohn & Wolfe, GCI Group, Hill & Knowlton and Ogilvy Public Relations Worldwide—are up by 13.5 percent over last year, to £438 million ($832 million) through the first nine months of 2006, accounting for  about 10.25 percent of group revenues.

Overall, WPP reported like-for-like revenue growth of around 4 percent in the three months to September 2006, with North American operations leading the way (8.3 percent growth) and U.K. revenues lagging (1.3 percent).

By communications services sector, public relations and public affairs showed the strongest growth, with revenue up almost 14 percent for the quarter, followed by branding and identity, healthcare and specialist communications up almost 12 percent. Advertising and media investment management were up by about 4 percent.

Sir Martin Sorrell, WPP’s chief executive, remains bullish on the U.S. “People have been asking whether there will be a soft or hard landing in the U.S.,” he told shareholders. “So far there hasn’t been any sort of landing. Compared with three months ago, we are more optimistic.”

He added that the growth of the internet was driving spending in public relations as companies sought to influence social networking websites, blogs and other online forums.

Public relations revenues at Omnicom—parent of Brodeur, Fleishman-Hillard, Ketchum, Pleon and Porter Novelli—were up by 13.1 percent in the third quarter of 2006 compared to the same period last year, generating close to $291 million in revenue for the quarter. Public relations represents about 10.5 percent of group revenues.

Overall, Omnicom’s net income for the third quarter grew 9.5 percent to $177 million, on a 10 percent increase in revenue to nearly $2.8 billion.

“We’re exceptionally pleased with the company’s performance,” said Omnicom CEO John Wren, adding that Omnicom’s investments, particularly in China, “are beginning to yield exceptional results. I’m bullish on the future in terms of business becoming available on a global basis.” He said public relations and specialty services agencies both made significant contributions to the third-quarter results.

The company says all of its public relations brands saw revenue growth during the quarter.

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