Global marketing companies struggled to make progress in year when Publicis proposed Omnicom merger

LONDON - Sept. 8, 2014 - PRLog -- Global marketing groups enjoyed only limited growth in 2013 – the year leading up to the ultimately unsuccessful Publicis-Omnicom merger plan.

Britain’s WPP was the immediate winner from that particular debacle.  With revenue of $16.5 billion, it retained the top slot in the global league, keeping just ahead of the US based Omnicom Group.   The French Publicis Groupe is having to live with being not much more than half the size of WPP - for the time being at least.

According to this year’s survey of the “Global Greats” in the marketing industry, published in Marketing Services Financial Intelligence, there has been no change in the top seven companies ranked by revenue, despite the acquisition of the UK based Aegis Group by the Japanese giant Dentsu.  That deal only widened the revenue gap between Dentsu and the next biggest group Havas to almost $4 million, alongside Hakuhodo.

The survey examined the 30 biggest publicly listed marketing groups around the world.

Revenues from the companies covered by the survey grew by 5%.   "Perhaps of greater importance is the 17.6% increase in finance costs across the sector that has eaten into the modest improvement in revenue.", the report said. "As a result, the companies surveyed recorded a mere 1.9% rise in profit after interest and tax."

Reflecting on why the Publicis-Omnicom merger plan fell apart, the report notes that last year Omnicom’s revenue was 55% greater than that of Publicis, but that its revenue was growing more slowly and the group’s operating profit margin was poorer.  Omnicom’s staff costs absorbed a much higher proportion of revenue than those of Publicis and its finance costs ate into a bigger proportion of its operating profit.   “None of this will have put Omnicom in a strong negotiating position”, the report said.