Madison and Wall: Saturday Summary
For the week ending October 14, 2023: Results From Publicis, LVMH, PepsiCo, JPM, Wells and Citi + a New Survey on Media Agencies
Beginning in January 2024, most Madison and Wall research and related data published on this Substack will primarily be available to consulting or advisory clients, or otherwise as part of a paid corporate subscription. Please reach out to brian@madisonandwall.com if you would like to discuss these services or for more information about the new offering.
Just ahead of New York’s Advertising Week events, we saw the first signs of earnings season over the last several days, and they were – in an absolute sense, if not always relative to expectations – positive. Publicis reported what will likely be the highest rate of growth among the large agency groups during the quarter (+5.3%) and is poised to do almost as well in the fourth quarter, too, despite very difficult comparables. We’ll see much more information about agencies in the coming week as Omnicom and Interpublic both report.
Among large marketers, results generally suggested increases in advertising spending as I previously expected. PepsiCo and LVMH both reported organic growth of 9% in the quarter, although relative to expectations, the former was considered positive and the latter considered weak. PepsiCo conveyed that its advertising and promotions spending was positive during the quarter without providing specifics. On Friday, several banks reported their earnings, including JP Morgan Chase whose marketing expense rose by 11% (although this was lower than net revenue, which was up 21%, or 15% excluding the First Republic acquisition). At Wells Fargo, advertising and promotion expenses were up dramatically – by 71% - on a 7% revenue gain. By contrast, Citigroup cut its advertising and marketing expenditures by 20% despite 10% revenue growth. Many other large marketers, including P&G and Nestle will post their results next week.
Beyond Publicis, a useful survey of the media agency business came out on Monday, and I wrote my take on it here. If you haven’t had a chance to read the original report from MediaSense and WFA, that can be found here.