Call It A Comeback: Ad Agencies Are Rebounding, Hiring And Passing Pre-Pandemic Levels.
More evidence of a robust ad recovery comes from a trio of Madison Ave. giants.
Last week's second-quarter results from Interpublic Group of Cos., Omnicom Group and Publicis Groupe show full-year forecasts, hiring and organic growth (factoring out acquisitions, divestitures and effects of exchange rates) all up, as reported in AdAge. Year-over-year double-digit increases in organic growth for each agency – 17.4%, 19.9% and 15.2% U.S. and 19.8%, 24.4% and 17.1% worldwide for Interpublic, Omnicom and Publicis respectively – suggests similar upward trends for WPP and Dentsu Group, both of which announce 2Q21 results next month.
“Our growth across regions, disciplines and client sectors speaks to more than a recovering global economy,” Interpublic CEO Philippe Krakowsky says, predicting 9-10% worldwide organic growth in 2021, an upgrade from April's 5-6% forecast. “It underscores the elevated value marketing and media partners can deliver on the integration of creativity, technology and data, at scale, amid the significantly increased velocity of digital transformation.”
To compare second-quarter results to the pre-pandemic levels of 2019, AdAge calculated each agency's “recovery ratio,” factoring in reported organic growth for the period of second-quarter 2019 through second-quarter 2021, showing both Interpublic and Publicis are generating more revenue now than before COVID, while Omnicom is off by just 4.2%.
Driving growth in the double-digits for Interpublic was automotive and retail advertising, up more than 20%, with consumer goods, tech/telecom and health care up in the mid-to-high teens. For Omnicom, organic growth was up double-digits in most areas, including advertising, customer relations management and precision marketing, while Publicis cited “a particularly high demand for digital media, first party data management and direct-to-consumer products and services.”
While U.S. employment in advertising, public relations and related services showed its biggest ever one month increase, according to data from the Bureau of Labor Statistics, these agencies followed suit, with Interpublic showing a 1.4% increase in worldwide headcount from a year ago, although still below its pre-pandemic level at year-end 2019. Speaking with AdAge, Publicis Chairman-CEO Arthur Sadoun said his company is hiring “massively” for its growing data and technology offerings but isn’t anticipating a massive hiring push company-wide.
Even with the good Q2 news, agencies continue to be wary of the pandemic and its worldwide impact looking forward.In many countries, Krakowsky says, “the second or third wave won’t necessarily be the same as the first. There’s the sense that you’re still making progress towards an outcome,” given the availability of vaccines and treatments. Omnicom's earnings release says, “Global economic conditions will continue to be volatile as long as the COVID-19 pandemic remains a public health threat. We expect global economic performance and the performance of our businesses to vary by geography and discipline until the impact of the COVID-19 pandemic on the global economy subsides.”