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Omnicom Marketing

Omnicom keeps core business steady in the face of holding co qualms


By Katie Deighton, Senior Reporter

October 15, 2019 | 5 min read

Hot off the heels of yesterday’s Disney win, Omnicom has posted organic growth for Q3 at 2.2% – a steady figure that sits in sharp contrast to the quarterly financials of its French rival Publicis Groupe.


Omnicom posted organic growth of 2.2% for Q3 2019

Omnicom, which has retained and expanded its 10-figure deal with the Walt Disney Company, reported 2.2% in organic growth, despite a 2.4% drop in revenues from the $3.7bn reported in the same period last year.

Overall sales in the third quarter were posted at $3.6bn. Omnicom attributed the dip primarily to the "negative effects of foreign exchange rates and disposition activity in excess of acquisitions over the past year”.

Its advertising and media business saw an upswing of 3.4%, while healthcare bolstered the bottom line with a growth of 9.5%. CRM Consumer Experience, which includes digital and precision marketing, grew 1.8% – offset by a reduction in project revenues from its events and shopper businesses.

CRM Execution and Support, on the other hand, was down 1.5%; chief financial officer Phil Angelastro said the holding company was “actively” working with management in some parts of the portfolio to improve, but noted other parts were “doing just fine”

Meanwhile PR was knocked by 3.8%. Chief executive Jon Wren said the latter had “underperformed” and committed resources to improving the offer going forward into the final quarter of 2019.

Overall, Wren said he “pleased” with the Q3 financial performance and noted it advertisers are still acting on “business as usual” in the face of macro concerns such as Brexit.

The CPG shield

The buoyant figures put Omnicom on a steadier full-year course than Publicis, which reported a 2.7% decrease in the same quarter and predicted full-year decline of 2.5% (figures filed just a few days before it also won a substantial chunk of Disney’s media business).

Publicis chief executive Arthur Sadoun blamed the “softer than expected” performance of its media agencies last week (11 October).

The Publicis results caused yet another flurry of analyst and commenter skepticism regarding the viability of the holding company model. Shares in the French firm plunged 12% and Tony Walford, partner at Green Square, predicted it would give the market “jitters”.

Even Wren was pushed by analysts to compare his results to those of Publicis.

Caveating that he has not “studied Publicis’ media business”, he nevertheless admitted he was “a little bit shocked to see it was in decline, because earlier in the year they won a couple of very large accounts”.

“They probably have suffered more because of their CPG clients,” he said, adding later that CPG was the sector his team has marked as most susceptible to in-housing.

“We’ve been fortunate to be winning business in that category. Unilever signed two of its biggest brands [Rexona and Sunsilk] to us just recently. So... we’re okay.”

Data without the legacy pricetag

Wren heavily addressed Omnicom’s data strategy in his prepared remarks. Unlike Publicis and Dentsu, the holding company has not acquired an expensive data business such as Epsilon or Merkle – a strategy it has already had to defend on previous earnings calls.

Wren noted Omnicom is currently seeking acquisitions in the fields of data, analytics, digital transformation and precision marketing, as well as healthcare, and drew attention to Omnicom Precision Marketing Group’s (OPMG) purchase of a majority stake in Smart Digital.

This, he said, would “significantly strengthens OPMG’s offerings in decision sciences, automation and machine learning”, while its acquisition of consulting and digital transformation shop Credera would further boost the performance division.

Finally, he noted the entire business is slowly more receptive to Omni, the company’s “people-based data and analytical service platform”. More than 4,000 employees have been trained in its capabilities so far.

He went on to reference a Forrester study that reported the Omni platform “offers the most creative integration of agency platforms” when compared to the data and technology units of its rival holding companies.

“This advantage was achieved because our investments in Omni were made for the purpose of serving the specific needs of our agencies and clients,” Wren stressed.

“It cannot be achieved simply by buying legacy data platforms that weren’t built with the flexibility required to meet the rapidly changing demands of today’s marketers.”

Omnicom Marketing

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A global leader in marketing communications, Omnicom provides brand and advertising services to over 5000 clients in over 100 countries.

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