Omnicom says 'flexible, integrated agency models' helped notch new biz in 2018

The holding company published fourth-quarter earnings Tuesday, posting organic growth of 3.2 percent, just under analyst expectations.

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Credit: Scott Eells/Bloomberg

Advertising holding company Omnicom published fourth-quarter earnings Tuesday, posting organic growth of 3.2 percent. The company — which holds shops including BBDO, TBWA/Chiat/Day and PHD — saw organic growth of 2.6 percent for full-year 2018.

The holding company's revenue in the fourth quarter of 2018 decreased 2.2 percent to $4.09 million from $4.18 million in the same period a year prior.

Still, Omnicom abides. The holding company saw a slew of major new business wins in 2018, including DDB's victory of the U.S. Army advertising account, which has been held by longtime agency McCann (and up until recently was still contested by DDB's competitors in the review). Also in 2018 Ford awarded its hotly contested global brand creative account to BBDO after a review.

The holding company's agencies last year also notched Dunkin's creative and Daimler AG's media.

Omnicom chief executive John Wren attributed a streamlined structure and "nimble, flexible and integrated agency models" as resonating with clients. The holding company has been moving over to a model that includes "practice areas" in disciplines like precision marketing and CRM, experiential, shopper marketing or public relations.

Wren said these areas have strong leadership and can quickly mobilize assets "to create customized solutions for our clients."

"It wasn't about collapsing our agencies into one, but rather investing in our agency brands and connecting them through our practice groups, global client leaders and platforms like [the holding company's marketing] platform Omni which allowed us to leverage our scale in an agile, fluid and diverse way," Wren said on the earnings call Tuesday morning.

Omnicom's French competitor Publicis Groupe reported fourth-quarter earnings last week and said it saw "higher-than-expected attrition in traditional advertising" of $170.4 million last year, mainly from several consumer packaged-goods clients in the U.S.

Asked by an analyst whether certain geopolitical factors like Brexit or a slowdown in China would factor into client spending in 2019, Wren didn't seem particularly alarmed.

"The clients that I've spoken to … they're cognizant of the fact that there's a lot of change going on in the world," he said. "Having said that … they're in the business of selling products and growing their top lines. So they're going to continue to do whatever activities are necessary to accomplish those tasks."

In response to another question, Wren said the holding company since its formation has been focused on serving blue chip clients globally, not concentrated on any one area or in any one industry.

That might mean the company would be less exposed to the spending trends of any particular category or in any particular place.

"If you take a look at our top 25 clients ... it's not a concentration of any particular industry. There's tech, there's auto, there's pharma, there's financial services. It goes across the board," Wren said.

As of late Tuesday morning, Omnicom's stock was down roughly 1.5 percent at $72.74.

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