John Wren, the CEO of global advertising group Omnicom, calculates that the next recession will be his fourth.
He was asked questions during an earnings call on the business heading into a more volatile macroeconomic environment.
“Maybe next year the growth isn't going to be so good?” said Steven Cahall of financial services group Wells Fargo.
Wren replied: “We haven't gotten through the recession yet. I've been through three others.”
However, Omnicom has been cleaning up the company’s portfolio of businesses.
“And in the last 18 months have been adding to those areas which are the highest growth,” Wren says.
He says the group is “fit for purpose” and he’s pleased where the company stands.
“We continue to invest organically in things that we believe will add to our revenue next year and beyond,” he says.
“And those investments are getting made as we speak.
“Most notably, we expanded and strengthened our ecommerce and retail media capabilities.”
Omnicom posted 11.3% organic revenue growth in the June quarter, saying the company is in a strong financial position, "well-prepared to manage through economic headwinds".
And Wren has increased, from 6% to 6.5%, the full year forecast to 6.5% to 7% organic growth.
Omnicom shares were up almost 4% to $US70,
At the Cannes Lions Festival of Creativity in June, Omnicom announced ecommerce collaborations with Amazon, Instacart, Kroger and Walmart.
“We now have more than 1,500 certified experts helping our clients navigate the complexity of executing media and driving sales on retail media platforms,” says Wren.
“The commerce partnerships we recently announced will provide us with additional access to online and in-store transactions and audiences, so we can deliver more precise and actionable consumer insights, more effective creative ideas and content and more targeted media for our clients.
“We are delivering these services by leveraging the power of our omni platform. We have developed omni commerce which integrates data about audiences, shopper behaviour, media, content, shelf analytics, sales and inventory.
“Omni commerce enables us to maximise brand awareness and increase the effectiveness of our clients' retail media investments, driving product sales and profitability.”
He also spoke personally to some of Omnicom’s largest clients at Cannes this year.
“And if I had to characterise a point of view, everybody is cautious because of the unknowns that are out there,” says Wren.
“But most sophisticated marketers who have lived through past recessions know that if they cut back too early, they lose sales as the recovery starts to happen.”
At Omnicom, major expenses are being watched, matching staff to revenue.
“Our management throughout the company is very, very aware and very capable of doing that,” he says.”And the second biggest expense is real estate, which improves every single year for us.”
People are very cautious about serious cutbacks and they aren’t expected as long as there's no dramatic traumas in the marketplace.
However, he says there's going to be a couple of areas where advertising is going to be absolutely necessary.
He forecast a streaming war, those that are advertising supported, coming next year.
“As the subscription services have to become ad-supported, that will create opportunities for our clients,” he says.
“And with the data and our capabilities to optimise client spending we should be able to take advantage of that to the benefit of the client.”
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