John Wren: The dividend is really a board matter, and it will come up in the board meetings that come between now and, say, February. We’ll have more to say as those meetings occur.
Phil Angelastro: Yes. I wouldn’t take it, the fact that we haven’t raised the dividend in 2023, as a lack of confidence in the business at all. Given the broader macro, I think, we’ve always approached it, and the Board has always approached it, with a level of conservatism and really continuing to keep the flexibility we have in the capital structure right now given the broader macro. But it’s certainly something that’s on the agenda, and I would not view it as a function of a lack of confidence in the business at all.
Steven Cahall: Thank you.
Phil Angelastro: Sure.
Operator: And our next question comes from the line of Tim Nollen with Macquarie. Please go ahead.
Tim Nollen: Great. Thanks very much. I’d like to pick up on one actual word that you used in your last comment, John, and that is flexibility. I saw this WFA survey recently talking about clients, I guess, coming up with more reasons why they want their agencies to do more. And I’m sure this is an age-old discussion that you have. But you’ve done a lot of work to reposition the business, reinvesting in data and technology and things over the years, divested assets. You just ran in your prepared remarks through a number of management changes internally that you’ve done recently. We saw today WPP just merged a couple of its big agencies. I just wondered, John, if you could maybe expound a little bit on what this WFA report means and how Omnicom feels positioned given that commentary.
John Wren: Sure. I have to admit to not reading the report that you’re referring to. But in terms of our portfolio, yes, there’s been a significant expansion in our media business, and that is growing. There’s been quite a bit of success in that. If you look at the conversions — I probably said that wrong, report. When you take media wins versus media losses, we continue to come out on top, and I’m confident that, that is going to hold. There’s a few opportunities, which we expect to be asked to participate in reviewing which are offensive opportunities where we’re not defending existing business other than in some statutory audit reviews. And our CRM business, which grew very strongly and hit a couple of road bumps in the beginning of this year, has come out of it very strong and just won a few very large and significant clients that are going to help us next year.
It becomes an increasing part of our portfolio as well. Our PR unit, even though it’s suffering a little bit because of the comparables of not being in an election year, next year is an election year, so that same group will be benefited as a result of that. So the portfolio has been tweaked. We’ve gotten rid of, in a very sensible way, assets in the past. And I think going forward, I don’t know if Phil commented on it or not, but I think where we were showing net divestitures for probably the last three years, we’re now with the acquisition activity we had and adding to the portfolio. From a net perspective, we’re growing those areas and we’re buying into those areas to support our companies where we see the greatest growth.
Tim Nollen: Yes. Great. No, I think that answers it. The survey was basically talking about advertising clients looking for more flexibility and streamlined services from the agencies. It sounds very much like that’s what you’ve been doing. And even your comments today about some of the changes you’ve made seem to support that. So thanks.
John Wren: The only thing I would add to that is I get more people back into the offices, which we continue to have success with, but there’s still work to do. I think that will further support our growth.
Tim Nollen: Collaboration is easier in person.
John Wren: Yes, sir.
Tim Nollen: Thanks a lot.
John Wren: Thank you.
Operator: And our next question comes from the line of David Karnovsky from JPMorgan. Please begin.
David Karnovsky: Thank you. John, we saw the uptick in precision marketing in the quarter. I wanted to see if you could provide more color there. Is that just comps? Or are you starting to see some movement on projects that maybe were paused previously? And then for Phil, on principal costs, it looks like or sorry, third-party service costs, it looks like growth accelerated there a touch in the quarter. Can you parse that out between maybe principal trading and other areas like events? And then just with principal trading generally, I don’t know how much you’re willing to quantify in terms of organic revenue contribution, but maybe you could discuss the business at a high level what the reception is from clients to the offer. Thank you.
John Wren: Sure. Handling your first question, some of the declines and challenges in the telecommunication and tech sector were probably more impactful to that practice area, in the precision marketing practice area. And as Phil mentioned earlier, we think that — the good news is we didn’t lose clients, we continue to win clients in that area. And we think those companies have gone through their adjustments the latter part of last year and the early part of this year. So we’re ascending. This quarter was better than the last, which was probably the toughest comparison we had. And with some of the new business wins that they’ve had very recently, 2024 sets up to be a very good year. I can’t really comment on how many projects we’re going to get in CRM in the next 90 days. But in terms of the business itself, its leadership and the products that we’re offering to our clients, I’m very confident in our performance in that area.
Phil Angelastro: Sure. Regarding the second question and third-party service costs, we don’t really parse the number in the way that you’ve suggested. But we had strong growth, as we said in our prepared remarks, in the media business, no question, as well as experiential. Both of those businesses do come with those third-party service costs as part of the business. Certainly, a reference back to Tim’s question regarding clients and the flexibility that they’re looking for, they’re certainly looking for a full suite of products from a media perspective and a wide range of marketing services that they’ll avail themselves of. And our service offering can cover all of those things that they’re looking for. So some of that growth certainly is in media, experiential, field marketing as well, but we had strong growth through most of our disciplines in the quarter, and we’re certainly happy with those results.
David Karnovsky: Thank you.
Operator: And our next question comes from the line of Michael Nathanson with MoffettNathanson. Please go ahead.
