Publicis Groupe on Thursday posted what media industry financial analyst Brian Wieser of Madison and Call calls “very solid — and much better-than-guidance implied” organic revenue growth of 5.3%.
While the third quarter earnings report from the global advertising industry giant is positive and help to bolster forecasts that are largely robust, there is one blemish that broadcast media companies in North America may wish to take note of.
By region, Wieser points out, the biggest one — North America — turned out to be the weakest. Growth came in at 3% year-over-year, with the U.S. up by 3.2% thanks to Epsilon’s double digit growth rate and media.
Media, Wieser points out, enjoyed mid-single digit growth. This was offset by “slightly negative” creative revenues.
While 3% growth for Radio, in particular, would be highly welcomed, it shows that the U.S. and Canada have challenges compared to other global regions.
And, it is the international marketplace — even with wars in Ukraine and in Israel — that will keep the growth on pace. “An increase in full year growth to a range of 5.5% to 6%, while still conservative, is unsurprising as a result,” Wieser predicts.
Publicis will “undoubtedly” be the industry leader for organic growth, with total industry growth estimated to come it at approximately 4% for the year.
What do the results tell us about the rest of the advertising industry?
Wieser opines, “Although Publicis’ results were undoubtedly stronger than other holding companies in the third quarter, the relative strength of media is probably aided as much by ongoing growth in proprietary trading services and market share gains as underlying growth in spending on a like-for-like basis.”
As such, he concludes, “It’s very plausible that large brand spending grew at a slower pace in the third quarter relative to the second quarter, although I think at a total industry level, spending from marketers not serviced by agencies – in particular, overseas advertisers from China spending outside of their home market – is possibly accelerating, at least based on my interpretation of Meta’s guidance. Meanwhile, I think that global creative services are likely very soft – or possibly declining – so to the extent Publicis grew its creative business, that would imply share gains for Publicis in that business.”
