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Follow on Google News | The world's three biggest marketing groups consolidated substantial lead over competitors in 2015WPP, Omnicom Group and Publicis Groupe accounted between them for almost 57% of all the revenue generated by the 30 largest groups. WPP outperformed all-comers with its revenue, but also earned the biggest post-tax profit and improved its op margin
By: Fintellect Ltd The research report "The Global Greats 2016", available free to subscribers to Marketing Services Financial Intelligence, found that WPP, Omnicom Group and Publicis Groupe between them accounted for almost 57% of all the revenue generated by the 30 largest groups. "And there is clear daylight between that trio and the second tier of Interpublic, database marketing agency Alliance Data Systems and Dentsu", the report added. "Trailing even further behind were Havas and Hakuhodo." WPP not only outperformed all-comers with its revenue last year, but also it earned the biggest post-tax profit and improved its operating profit margin to 15.5% from 15% a year earlier. The average annual revenue growth recorded by the 30 surveyed groups was 9.7%, but the biggest growth rate of 52.6% was recorded by one of the smallest companies – the US based digital advertisement placement software provider Tube Mogul. Criteo, another newcomer to the survey from digital arena, chalked up a 32.6% growth rate. According to the research, the overall growth in revenue did not lead to improved staff utilisation as might have been expected. The ratio of staff costs to revenue of companies in this latest survey was 63.2%, compared with 63.4% for the same companies in the previous period and unchanged from the 63.2% reported for the companies in last year's survey. The failure to convert increased revenue into increased profit was reflected in a fall in the operating profit margin of 0.2 percentage points to 13.2%. Among companies that improved their reported operating profit margin contrary to the overall downward trend, were Next Fifteen Communications Group, Communisis, Endurance International Group and M&C Saatchi. With the exception of Endurance International, in each case the improvement reflected a bounce-back after incurring abnormal costs in the previous year. According to the report's editor Bob Willott, the most salutary finding in this year's survey was that, despite increasing revenue by 9.7% and increasing operating profits by 8%, the residual post-tax profit rose by only 5.4%. Why was that? "Put simply, the operating profit margin slipped slightly and finance costs rose by 11.7%." More than one third of all companies included in the survey reported a post-tax loss for the latest year. "The losses were widely distributed in geographical terms and the number of loss-making companies was not materially from the previous year", Willott said, "but arguably there were too many of them." ENDS The survey "The Global Greats" examined the top 32 marketing companies listed on major stock markets around the world and ranked them by - among other measures - revenue, operating proft margin, staff costs as a percentage of revenue, finance costs as a percentage of operating profit, and post-tax profit attributable to shareholders. The full report is available free to subscribers at www.fintellect.com. End
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