Omnicom's Wren: Coordination Across Agencies 'More Important than Ever'

On Earnings Call, CEO Stresses Need to Pool Resources to Serve Big Clients

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Before delving into talking about Omnicom Group's financial performance during its third-quarter earnings call with analysts this morning, CEO John Wren explained a new area of focus that 's sounding familiar in adland: the need to pool resources from different agencies to serve a single client.

John Wrenn
John Wrenn
"We continue to generate solid organic growth particularly in light of the macroeconomic environment," Mr. Wren said. As he explained the reasons why the group has turned in a solid performance this year, he attributed talent, and increasing coordination of integrated marketing among top 50 clients. What that means is bringing together top talent from different agencies to service the biggest and most important accounts for Omnicom.

"Collaboration and coordination across agencies is even more important today," said Mr. Wren, as many of them are seeking to slash marketing budgets. The approach is helping Omnicom retain and grow business organicallly, or, as he put it, clients are "expanding our mandates and awarding us new pieces of business."

Mr. Wren has always been hands-on at the holding company level when it comes to servicing clients. But today's discussion suggests that the company is making a new and broader effort to ensure that Omnicom can pool its creative, media, digital, CRM, and analytics resources to help keep its biggest clients happy.

He stopped short of talking about creating dedicated agencies, which is the strategy being employed by rival Martin Sorrell. Mr. Sorrell, by contrast, is using such team structures, or essentially newly-built agencies as a way to pitch new accounts. With a half a dozen of these new dedicated agencies, such as Red Fuse or Team Lincoln, under the WPP roof already, he seems to be having some success.

As far as results, Omnicom continued to turn in a solid performance. Mr. Wren noted that the advertising and CRM disiciplines performed well, and U.S. saw organic growth of 3.1%. Net new business was over $1 billion for the quarter, he said, but did not call out particular wins.

Omnicom's net income for the third quarter of 2012 increased slightly to $203.9 million from $203.7 million in the third quarter of 2011. Worldwide revenue was essentially flat, growing to $3.4 billion from $3.38 billion in the quarter. While domestic revenue grew 3.2% to $1.76 billion, global revenue took a slight dip. In a sign that could show the impact of the troubled Eurozone and other areas, its international revenue decreased 1.7% to $1.64 billion.

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