Performance and staff numbers decline across global agency groups in 2024, as restructures continue

Just two of the “big six” holding companies exceeded their target for organic growth in 2024, including Omnicom, as it prepared to buy Interpublic, which underperformed.

Publicis Groupe continued to strike out ahead of its rivals last year with 5.8% organic growth in net revenues, outperforming its own forecast of 4-5%, Campaign’s analysis of the latest financial results show.

Meanwhile Omnicom achieved 5.2% organic growth, in gross revenue terms (it does not report net revenues) also outperforming its own 3.5-5% target.

For the rest of the group, however, there were challenges. Interpublic reported a 0.2% year-on-year rise in organic growth based on net revenues, which was below its 1-2% expectation.

The other three global agency groups were in decline. 

WPP and Dentsu had both initially prepared investors for, at best, 1% organic growth in 2024—though by the summer WPP had revised its forecast to -1% to 0%. In the end, WPP achieved -1% in revenue less pass-through costs, as its chief executive Mark Read admitted it had been “a tough year” for growth. Dentsu, meanwhile, also downgraded its forecast by November—to 0% growth—and went on to deliver -0.1%.

Havas was the most overly optimistic, with chief executive and chairman Yannick Bolloré setting expectations at 2% at the time of its Q3 2023 results but the group ultimately achieved -0.8% for 2024. Its results are the first since it was spun out of parent company Vivendi into a separate listing on Euronext in 2024.

FY 2024 organic growth:

‘We’ve not realised our full potential’

Among the groups in decline, WPP’s results appear to be linked to internal simplifications, such as the merger of VMLY&R and Wunderman Thompson to form VML and the reorganisation of Group M. These weighed on new-business performance in the first half of the year. 

Read hinted to Campaign that internal restructuring had “perhaps” an effect on new business. WPP was “more internally than externally focused” in the first half of 2024, he suggested.

Read also told an investor presentation that Group M needed to perform better. “To be frank, we’ve not realised our full potential for the last 18 to 24 months,” he said ahead of Brian Lesser, the new global chief executive of Group M, laying out his five-point strategy.

Meanwhile, Dentsu unveiled a new “mid-term management plan” (MTMP) focusing on media, rather than customer experience management, in efforts to compete with rivals, including the proposed new Omnicom.

The plan includes a “Media ++” strategy that will focus on selling media to clients “plus” extra services such as creative, CXM and/or other products and services.

Havas’ results showed North America declined by 6.6%, whereas other regions (Europe, Asia Pacific and Africa, and Latin America) all grew organically.

In the US the decline was “primarily due to the loss of Pfizer as a client”, while Havas Media had a “challenging year” and Havas Creative “recorded a solid performance”, its financial report said.

In contrast, Publicis chief executive Arthur Sadoun explained its favourable 2024 results were supported by a Q4 that was stronger than expected—up 6.3% organically—because of “a new-business tailwind” and “there were less cuts than we expected in traditional advertising”, while “Sapient came back to flat”.

He told Campaign that the company’s performance meant it “has become the largest holdco [in the world, by net revenue]”. The group also revealed it gave staff an average salary increase of 7% last year.

Omnicom chairman and chief executive John Wren set out his agency group’s results in the context of its proposed merger with IPG.

He said the holding company is “incredibly well prepared” for the acquisition, noting 5.2% growth in both Q4 and for the full year.

Referring to the previously announced $750 million “annual cost synergies” expected from the acquisition, he explained that, in the new merged entity, “we will eliminate redundant roles, functions and back-office operations, which we expect will generate cost savings exceeding $130m”.

Separately, IPG’s chief executive, Philippe Krakowsky, revealed a restructure will take place throughout 2025 to get IPG ready for its acquisition by Omnicom, with the intention of saving IPG about $250 million this year.

Commenting on the latest financial results, he said “solid new business momentum in the fourth quarter and early 2025 will begin to come online later this year” but added that “it will not offset sizable client losses incurred last year due largely to changes in the media trading environment”.

Agency workforces shrink

All but one of the “big six” holding companies revealed declining staff numbers in 2024, compared with 2023.

Only Publicis increased headcount, by 4.6%, to a provisional figure of 108,000 people (its annual report in April will confirm final figures). 

Interpublic and WPP stood out for downsizing the most. The former recorded a 7.1% reduction, to 53,300 people, and the latter revealed a 5.4% cut, to 108,044 staff. Both sold agencies in 2024, which contributed to the decline. 

Havas slimmed down by 1.9%, to 20,610  people, while Omnicom also shrank, by 1.3%, to 74,900.

Quizzed by Campaign on whether the forthcoming merger will bring additional “thousands” of job cuts, Omnicom chairman and CEO John Wren did not respond directly but said: “A lot of the synergies are going to come out of the overhead side of the business, not the client-facing, client-servicing business.”

Dentsu’s provisional figure of 71,000 staff for 2024 is just short of its confirmed 2023 figure of 71,127.