November 14, 2012 / 11:30 AM / 8 years ago

Omnicom more positive on 2013 ad market outlook

BARCELONA (Reuters) - Omnicom Group (OMC.N), the biggest ad agency in the United States, said it is feeling “increasingly positive” on the outlook for the advertising market next year, despite a low-growth economy persisting across the globe.

Chief Executive John Wren declined to say how much he expects the ad market or Omnicom to grow next year, saying staffers at his agencies would be in talks in the coming 4-5 weeks with major corporations to determine their ad budgets.

“It’s too early to make a clear prediction,” he said at the Morgan Stanley TMT conference on Wednesday.

“People expect a lower growth environment across the globe, but that isn’t a disaster. I am increasingly positive on 2013, especially the latter part. I’m not hearing any horrible, scary things from clients we talk to.”

Advertising spending generally tracks economic growth, so slowdowns in world markets tend to have a knock-on effect for ad agencies.

Economic effects are being amplified by changes to the way corporations spread the word about their products. An increased focus on the Internet means ad budgets can be tweaked in an instant, rather than the weeks it used to take to craft a magazine or newspaper campaign.

Omnicom, home to advertising, media and public relations agencies such as BBDO Worldwide, DDB Worldwide, TBWA Worldwide and Fleishman-Hillard, posted organic growth in the third quarter of 3.5 percent.

It outpaced rivals WPP (WPP.L) and Publicis (PUBP.PA), which saw 1.9 percent and 2 percent organic growth respectively in the quarter.

Most major agencies noted a steep slowdown in customers’ spending on ads in September, although Publicis said its organic growth rebounded in October to 7 percent.

WPP said on Monday that its October organic growth would be similar to the first quarter, when it reached 2 percent.

Wren cautioned against looking too closely at month-to-month changes in the market and declined to give details of Omnicom’s performance in October or how the fourth quarter was progressing.

“We initially thought this year would come in around 3.5-4 percent organic growth, and it will probably end up in that range,” he added.

Editing by James Regan

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