Ciesco’s review of the full year results from the big four marcoms companies – WPP, Omnicom, Publicis Groupe and Interpublic (IPG)
IPG leads the holding company pack in 2015
Corporate finance advisory firm Ciesco has produced its review of the full year results from the big four marcoms companies – WPP, Omnicom, Publicis Groupe and Interpublic (IPG). IPG seems to be the narrow winner in a year of mixed fortunes for all.
Publicis announced their reorganisation in December 2015, aiming to ‘implement the most integrated organisation in the sector’. CEO Maurice Levy stated that 2016 will be a year of transition and the company needs time to catch up with the growth rate of its rivals, with the aim of beating them on organic growth in 2018.
Chris Sahota, CEO of Ciesco, says: “Publicis has had a challenging year with organic growth of only 1.5%. Given that they announced digital activities accounted for 52% of group revenue and grew 5.4% organically, this would indicate that the remainder of the group’s activities have been in decline.”
2015 saw a number of winners and losers from the ‘media tsunami’ or ‘mediapalooza’, when marketers put an estimated $25-$30bn in media billings into review. This includes Omnicom taking a large portion of P&G’s $2.6bn North America account at the expense of Publicis. IPG won Coca-Cola’s North America account. Publicis also lost the $900m Walmart account, but did win the $200m Visa account from Omnicom and Etihad Airways from WPP. WPP’s big wins included landing L’Oréal’s $870m US account from IPG.
We expect 2016 to see a continuation of M&A activity by the big four holding networks as pressure builds from emerging buyers entering the sector. The sheer size of some of the consultancy, accountancy, and technology firms that are gaining a foothold in the marketing services sector, such as EY, PwC and IBM, will no doubt be a worry that sits on the top of holding company executives’ minds.