Omnicom predicts tough times ahead

Omnicom Group has posted a 5.6% rise in profit for the third quarter. In spite of the increase the parent company of ad agency networks including TBWA, BBDO and DDB, has predicted a tough fourth quarter.

The group’s advertising revenues held up and rose 6.9%, but PR revenues fell 1.2% and speciality services dropped 3.2%.

Omnicom’s net income is $213.6m (£130.2m), up from $202.2m (£123.2m) year-on-year. Total revenues for the quarter increased 6.9% to $3,316.2m (£2,021.7m).

Domestic revenue rose 3.8% and international revenue rose 10.5%.

Chief executive John Wren says: “No one could have anticipated the current credit crisis or the unprecedented volatility that’s created in the financial markets. We are in the process of trying to assess the impact these events we have on advertising spending for the first half of 2009.

“At this point, our clients generally remain very cautious. The only two sectors which have cut back in fourth quarter spending are automotive and some of our retail clients.”

He adds the group expects the fourth quarter to be a “challenge”.

Rival WPP Group has reportedly imposed a hiring freeze on its networks and revised revenue targets in the face of the economic downturn.

Omnicom recently ended talks to acquire UK independent agency Beattie McGuinness Bungay