‘More of an operating company than a holding company’: Agency groups transition amid mixed growth picture
The Big Four global agency holding groups reported mixed results in the second quarter, ranging from a narrowing of WPP’s decline to mid-single-digit organic revenue growth for both Omnicom and Publicis Groupe.
Agency groups are generally managing significant business transitions, driven in part by the development of new AI tools and industry consolidation. Omnicom, for example, is still integrating Interpublic Group’s assets, such as by merging Mediahub with Hearts & Science, while WPP is seeking to move from the classical “holding company” model to one fully integrated advertising business driven by AI.
All of the groups have raced to develop a similar set of AI tools and data integrations which have quickly become table stakes for their respective businesses. On Omnicom’s earnings call, Wren characterised Omnicom’s “assets and capabilities create a unified intelligent layer that is the foundation for true agentic marketing”, language that has become broadly similar across all holding groups as demand for agentic solutions increases. Differentiation with clients, therefore, may come down to how effectively talent uses those tools.
Here are toplines and takeaways from Q2 results for Publicis, Omnicom, WPP and Havas.
Publicis
Publicis Groupe reported 4.8% year-on-year net organic revenue growth to €3.6bn in Q2. The holding group also raised its full-year organic growth guidance to 4.5% to 5.5% from 4% to 5% previously.
All regions experienced growth apart from the Middle East and Africa (-8.3% to €104m). Publicis Groupe’s largest regions, North America (+5.4% to €2.19bn) and Europe (+5.0% to €899m), both posted mid-single-digit growth.
According to the Groupe, “AI-powered marketing services” represented 87% of its total net revenue in Q2. The other 13% of group revenue comprises Publicis Sapient, which Sadoun acknowledged suffered a “mid-single-digit decline” in part due to uncertainty caused by the Middle East conflict.
Publicis chairman and CEO Arthur Sadoun outlined that, on top of Publicis’ “sustained financial overperformance”, the group also accelerated investment in H1, with notable acquisitions in data collaboration partner LiveRamp and sports marketing company 160over90.
“By putting Epsilon data at its core and connecting it to our end-to-end media ecosystem, we will be uniquely positioned to make sports, the fastest-growing media segment of our industry, addressable and measurable at scale,” Sadoun said on the company’s earnings call, adding the acquisition of LiveRamp, once closed, “will enable us to enter a totally new addressable market.”
Sadoun envisions LiveRamp, sitting alongside Sapient, Epsilon and AI platform Marcel, as key to “delivering agentic transformation for our clients safely and transparently in their own environments.”
Since launching Marcel in 2017, Publicis has nearly doubled its EBITDA (the company’s measure of profit), Sadoun remarked.
Sadoun claimed Publicis’ strategy is “the polar opposite of our peers'”, though most agency groups are now pursuing comparable strategies to Publicis’ “Power of One” model.
Publicis remains the fastest-growing of the major holding groups; however, Sadoun highlights that “not only are we winning more than our competition, but we are also losing less”. Publicis’ retention rate is “close to 100%”, with no losses in the last 12 months “that could materially impact in the next 12 months,” according to Sadoun.
Omnicom
Omnicom reported 6.1% year-on-year organic revenue growth to $6bn for the company’s “core operations” in Q2, just the second earnings report since the company acquired Interpublic Groupe.
Omnicom notably reports on a gross basis rather than a net basis, meaning such growth includes pass-throughs, including principal-based trading. This makes the company’s earnings figures impossible to compare directly with those of its competitors.
However, as media industry analysis firm Madison & Wall estimated, it is likely that around $500m of Omnicom’s organic revenue growth was driven by pass-throughs, including principal media, and that the company would therefore have reported a -2% loss in organic revenue.
Nevertheless, on a gross basis, Omnicom reported that its Integrated Media segment accounted for the majority (52.5%, or $3.1bn) of total revenue from its Core Operations.
This was followed by Advertising business ($942.6m, or 15.7%), Public Relations ($679.1m, or 11.3%), Experiential & Other (669.2m, or 11.2%), and Health ($555.9m, or 9.3%). Among these, Integrated Media and Experiential & Other grew double-digit, while Health was flat and Advertising was down “high single digits”.
Omnicom chairman and CEO John Wren lauded the results, commenting that the new company is “now more of an operating company than a holding company”, one that is “built for an era where speed, integration and scale matter most.”
The rate of organic growth at the new Omnicom is outstripping that of the old Omnicom and pre-merger IPG.
Wren signalled that the group will shift its focus to three areas: agentic marketing, expanding partnerships with clients, and developing media opportunities in sports, influencer marketing, commerce, and AI-driven discovery.
On the company’s earnings call, Omnicom Media CEO Florian Adamski remarked that brands are “looking for value from every dollar of marketing investment” and “measurable outcomes”, and for data and commerce solutions to be unified, as it is in Omnicom’s Omni platform.
“We’re seeing existing clients growing as we help them to better convert audience strategies and come up with more impactful, smarter activation and also have a better closed-loop attribution and measurement,” Adamski said.
In the meantime, Omnicom continues to realise “cost reduction synergies” by cutting costs within the merged company. On the company’s earnings call, Wren reiterated that Omnicom will achieve $900m in cost-reduction synergies, with this figure expected to rise to $1.5bn by mid-2028.
“Many of the companies that we had identified for sale were actually bringing us down in many quarters in terms of what our organic growth was,” said Wren.
WPP
WPP reported a 3.2% like-for-like decline in revenue to £6.4bn in H1.
However, the agency group indicated that Q2 showed an improving trend, with revenue less pass-through costs declining 2.3% year-on-year. This compares with Rose’s first earnings call in Q3 of last year, when WPP reported a 5.9% decline in revenue less pass-through costs, prompting Rose to declare the company’s performance “unacceptable”. This was especially true of the UK, which posted the deepest decline outside of China.
Shares of WPP have jumped over 40% since the earnings release, driven by stronger business momentum. The better figure was attributed both to “easing comparisons” and to better performance by WPP Media, including several new business wins such as Airbnb, Estée Lauder and Heineken.
According to COMvergence figures, WPP Media led both total and net new business globally in Q1, generating $1.5bn in new client billings. This was followed by Omnicom Media Group, with $1bn in new client wins and $1bn in retentions, while Publicis Media ranked a distant third.
The improved losses also come as WPP has sought continued cost savings as part of a three-year turnaround plan, led by CEO Cindy Rose, dubbed Elevate28. Campaign reported earlier this year that WPP expects to cut “hundreds” of jobs this year as part of Elevate28.
Rose said WPP is “firmly on track” with the first phase of its turnaround plan, which included “put[ting] in place the building blocks of the new organisational structure” as part of an effort to transition from “a complex holding company to a single, integrated company with four operating units across four regions,” all of which is “underpinned” by WPP’s agentic marketing platform, WPP Open, itself powered by data collaboration platform InfoSum.
“As AI reshapes our industry, the winners will be those companies that can effectively embed technology directly into their marketing operations, put data and AI to work to gain a deeper understanding of their consumers, reimagine workflows, and skill their workforce,” Rose argued on WPP’s earnings call.
Rose added she was “encouraged” by WPP’s H1 performance being in-line with its expectations.
“Phase 1 is about stabilising our performance, arresting the decline, building momentum, and demonstrating that the changes we’ve made are translating into tangible results,” she said, adding that while “it will take some time for the impact of these changes to fully flow through our numbers”, leading indicators like net new business growth “demonstrate our strategy is working.”
Havas
Havas reported 2.5% year-on-year organic revenue growth in Q2 to €724m. Adjusted EBIT, the company’s measure of profit, was up 4.2% year-on-year to €150m in H1, which the company attributed to “tight control over personnel costs”.
Growth was primarily driven by media and creative agencies in the North American market (+6.4%), which comprises 35% of Havas’s net revenue.
In comparison, Havas posted flat revenue growth in Europe, from which it derives half of its net revenue. The UK and France both reported modest declines in organic revenue.
Of the global figure, Havas Media accounted for nearly two-fifths (38%) of net revenue, compared with 42% for Havas Creative and 20% for Havas Health.
Chairman and CEO Yannick Bolloré said the company’s Q2 performance “reflects the resilience of our model, the strength of our client relationships, and the continued success of our Converged strategy.”
Like Wren, Bolloré pointed to future initiatives to strengthen the group’s capabilities in sports marketing, experiential activation and “corporate influence”, as well as “disciplined investment in AI”, including Havas’s Converged.AI operating system.