Omnicom’s organic growth decline stays in double digits

Health business is climbing, but revenue from CRM and travel clients continues to drop.

The impacts of the pandemic on client business continued to be felt at Omnicom in Q3, with the biggest declines having come from its CRM segment.

The holding company’s organic revenue declined by 11.7% in the quarter ending Sept. 30, with Omnicom posting a matching number for its organic revenue year-to-date.

Organic revenue from advertising, which represents more than half of Omnicom’s business, also fell by 11.7% in Q3, and is now down by 13.2% for the year-to-date.

Omnicom’s biggest declines, however, were in its CRM business: the CRM Consumer Experience segment had an organic growth decline of 19.3%, and the CRM Execution and Support segment (which covers field marketing, point-of-sale, sales support and merchandising) had a 19.4% decline. That accelerated the declines for the year-to-date, which sit at 15.8% and 15.6%, respectively.

One bright spot for the holding company was healthcare, which posted organic growth of 3.8% in Q3, up by 5.3% for the year-to-date. PR also had a less-stark decline of 3.4% in organic revenue in Q3. Revenue from pharma and health clients grew by 4.6% year-over-year, now representing the biggest segment in Omnicom’s client mix, while revenue from technology clients grew by 17.8%.

On the flip side, revenue from travel and entertainment clients that are continuing to face massive challenges amid the pandemic, dropped by a staggering 47.5%. Revenue from food and beverage clients declined by 10.7%, CPG by 14.7% and auto by 18.9% in Q3.

Regionally, the U.S. – Omnicom’s biggest market by revenue – had organic revenue drop by 11.4% in Q3, a steeper decline than the 10.3% it posted for the year-to-date. Revenue in the rest of North America, meanwhile, declined by 7.6%, with the company reporting a 12.7% revenue decline for the market in its year-to-date results.

While financial expectations for the major advertising holding companies are not high due to the volatility and uncertainty of the pandemic, Omnicom’s Q3 results fell far behind those of competitors Publicis Groupe and IPG, both of which beat expectations by slowing their organic growth declines to the low-to-mid single digits. WPP announces its Q3 results on Thursday, with Dentsu’s coming in November.