Ad Groups Bet On Cost Cuts, Digital Investment, Emerging Markets In 2010

With ad buyer Aegis Media’s earnings release on Thursday, the big European ad groups’ Q3 financials are now in.

So what do they show? On this evidence, in 2010 they will be smaller businesses with fewer staff and a renewed emphasis on digital and emerging markets…

Digital: It might not be growing as fast as everyone hoped it might, but digital revenue is on the way up. Publicis Groupe’s online revenues grew 5.5 percent in the year to September 30 and CEO Maurice Levy says he will reach his goal of making a quarter of profits from digital next year. WPP’s healthcare and specialist comms division, which includes its online operations, suffered a 6.6 percent revenue drop compared to an 8.4 percent decline for the group as a whole. Havas’ digital revenues increased five percent in its H109 and now accounts for 16.4 percent of the group’s total.

Cost cuts: Just as newspapers have found, in a digital age you need fewer staff. WPP CEO Sir Martin Sorrell managed to better his headcount reduction target and has axed 11,232 jobs so far this year. Publicis is looking to save $13 million in “integration costs” from its purchase of digital agency Razorfish, while Aegis Media cut 780 jobs earlier this year and says its cost-cutting plan “accelerated” in Q309.

Emerging markets: WPP continued its move into digital and emerging markets by buying a 51 percent stake in Bangkok-based digital ad agency mInteraction in Q309. In the first three quarters of 2009 Publicis made 22.1 percent of its revenue from developing nations, compared to 21.7 a year ago, and one of its key aims is to grow that proportion next year.

And here are companies’ top-line earnings results…

Aegis Media: Revenue up one percent in the year to September 30 to £36.7 million, down 10.8 percent at constant currencies.

WPP: January-September organic revenue was down 8.4 percent to £6.29 million.

Publicis: January-September revenue was down 2.3 percent

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