The numbers
Omnicom reported $3.9 billion in revenue for its fiscal quarter ending Sept. 30. Organic growth was up 6.5% year over year, coming in slightly higher than last quarter’s 5.2% organic growth.
Advertising and media services, as well was experiential, drove the revenue increases, up 9.4% and 35.3% year-over-year, respectively.
The holding company maintained its guidance of 4% to 5% growth for 2024, despite uncertainties around the upcoming election and Q4 spending.
The watercooler talk
Omnicom’s margins were roughly flat at 15.5% year over year as the holding company invests in acquisitions and technology that position it for the future.
In January, Omnicom closed its $800 million acquisition of e-commerce platform Flywheel, allowing it to “directly measure online retail sales generated from media campaigns across the full advertising journey,” said John Wren, chief executive officer (CEO) of Omnicom Group, on a Tuesday earnings call.
This summer, Omnicom Production was formed with a content studio in New York City. The holding company leveraged its partnerships with tech giants Adobe, Google, and Microsoft to capitalize on opportunities to produce content more efficiently with AI.
Omnicom also formed Omnicom Advertising Group (OAG) in August, consolidating its creative agencies BBDO, DDB, and TBWA, as well as advertising networks Goodby Silverstein & Partners, GSD&M, Merkley & Partners, and Zimmerman, under one leadership team to facilitate access to talent and teams across its networks.
The holding company boasts some key wins since the start of 2024 that have aided in its growth. Most Notably, in September, Omnicom Media Group (OMG) won Amazon’s multibillion-dollar media account in the Americas, a major coup from rival IPG Media brands.
According to Phil Angelastro, evp and chief financial officer (CFO), Omnicom will continue to invest in areas like AI, which could impact margin growth in the future.
The key quote
Wren said that rather than a cost-saving initiative, consolidating its creative advertising network under OAG was “more sensible” in order to streamline talent mobility and investments in technology.
“We weren’t looking to cut heads, we were looking to improve the quality of the products of our brands, and the tools that those folks have available to them,” said Wren.
Despite the shared leadership team, he remained steadfast on the importance of Omnicom’s agency brands.
“We’re still very dedicated to the brands and various cultures that the brands bring to the party, because every one of our agency groups is different in their approach,” he said. “It puts us in a situation where I think we can optimize the best of both worlds.”