Enero, the owner of creative agency BMF, Hotwire Group, digital and experiential agency Orchard and adtech platform OBMedia, is optimistic about the prospects for the advertising industry next year.
The market is still challenging but there are early signs of recovery, the company says.
In a trading update, the company says agencies are cycling a strong comparative period. Revenue dipped by 7% in the September quarter but was still above levels seen in the second half of last financial year.
CEO Brent Scrimshaw says there is no doubt that the marketing industry has been challenged globally, with many common themes within the technology sector.
“However large, market setting technology businesses are beginning to show some small signs of positivity in the digital advertising market and clients are also indicating some positivity for the first time in the last 12 months,” he told the company’s AGM.
“We do believe we are (at) the ‘bottom of cycle’ right now, and look forward to the second half of the fiscal year with some renewed optimism.”
Scrimshaw says the question he is most frequently asked in the past few months: When do you see the current market sentiment changing?
And: When can we expect your clients to resume a more confident, growth orientation in both their short and mid term thinking and business outlook?
“Like everyone, we continue to look for signs of market recovery and remain focused on positioning each of our portfolio businesses to be leaner, sharper and more agile in order to capitalise on a more robust and growth oriented client investment when it returns,” he told shareholders.
He says Enero businesses continued to add a number of blue-chip clients to our portfolio, including Lego, QBE, Tennis Australia, Alinta Energy, A2 Milk and Open Text in the last 12 months.
“Significantly, and directly as a result of a deliberate cross business focus, 31% of our revenue now comes from clients who have relationships with more than one Enero Group brand, providing us with more opportunities to engage with our clients and also to drive stickier recurring revenue in the long term,” Scrimshaw says.
Enero in the financial year ended in June made a “significant” reduction in global headcount.
“However, we also made a number of strategic senior hires to key leadership positions around the globe,” Scrimshaw says.
“It's critical we maintain and extend our competitive advantage and are well positioned with the most modern and relevant capability to continue to change the shape of our work and most importantly anticipate rapidly changing client needs to deliver a differentiated, innovative, and market-leading services offering.”
Enero’s strategic intent:
"That is to provide, deep industry knowledge within long term growth industries in order to drive competitive differentiation
"To continually refine our progressive and modern marketing services to create client stickiness and success
"And to ensure the deployment and relevance of those services in markets of strategic importance and scale in order to respond with world class work, to briefs of all shapes and sizes."
A slide from Enero's presentation to shareholders:
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