In naming John Wren as CEO last week, Omnicom Group reinforced its mission as a diversified communications company.
The move was long anticipated. Mr. Wren, 44, was named Omnicom president in September 1995 and has headed its fastest-growing division, Diversified Agency Services, since 1990. He takes the reins Jan. 1 from Bruce Crawford, 67, who remains chairman.
DYNAMIC DAS UNIT
Although Omnicom was formed 10 years ago in a three-way ad agency merger, the DAS division in the past five years has been the company's most dynamic growth engine.
"DAS was a mess of different businesses 10 years ago. Now it's a shining star," said Lauren Fine, analyst at Merrill Lynch.
From 1993 to '95, the unit's revenue outgrew Omnicom as a whole, 47% to 37%. Next year, DAS will contribute a third of Omnicom's total revenue, up from 25% in '95, said Fred Meyer, chief financial officer. At current growth rates, that would put DAS over $1 billion in revenue.
With those kinds of numbers, and with Mr. Wren elevated to the high altitude of the CEO's suite, it will become harder for advertising traditionalists to pigeonhole so-called "below the line" services.
"I think it's exciting. The advertising business is maturing, and John has an innate sense of the advertising business," said Steve Dapper, president-CEO of Rapp Collins Worldwide, the largest DAS unit.
At the same board meeting where Mr. Wren was elected CEO, directors heard updates on seven DAS agencies acquired three years ago. Six of the seven have outperformed Omnicom's original objectives by 50% or more.
"At all of these agencies, the people continue to stay and work for us and contribute. That's what I'm most proud of," Mr. Wren said.
Mr. Wren spent several years in traditional advertising at Needham Harper Worldwide, but his diverse background has caused some Omnicom managers to fret that "he's not an ad guy."
STAYING THE COURSE
But Mr. Wren expects to keep Omnicom on its current course.
"We'll probably grow a lot larger, but we're going to stay a creatively-driven, client-centric company," he said.
DAS will also continue to grow rapidly, in part from acquisitions in interactive marketing. In September, it announced investments in five interactive companies.
Mr. Crawford had been grooming Mr. Wren as his successor for years and there were no other serious contenders for the post.
Mr. Crawford said he will evaluate his chairmanship on a year-to-year basis, but added, "Certainly, I don't expect to be here in three or four years."
Copyright December 1996, Crain Communications Inc.