Diversified revenue stream
Omnicom soon will get the majority of its revenue from disciplines other than its longtime core franchise of advertising and media.
Just 52% of Omnicom's $14.3 billion worldwide revenue in 2022 came from advertising and media, according to the company's financial disclosures. Advertising and media grew organically by 7.3% for the year—good growth, but far below the growth of Omnicom’s red-hot precision marketing business, which last year scored organic growth of 17.1%.
Omnicom in total delivered 2022 worldwide organic revenue growth of 9.4%, second to Publicis Groupe’s 10.1% organic growth among the biggest legacy agency holding companies. Organic growth is a key financial measure that factors out acquisitions, divestitures and effects of exchange rates.
Omnicom Precision Marketing Group is a $1.4 billion revenue business, according to the holding company’s 2022 annual filing. It within a few years could become the company’s second-biggest discipline, behind advertising and media. The group includes consulting, consumer experience and platforms, and customer relationship management and decision sciences. It’s led by units including Credera, Critical Mass and Rapp—ventures that still attract fewer headlines than their creative counterparts.
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Data is core to Omnicom’s present and future. Much of that data capability broadly referred to in the company as Omni was built from the ground up.
“A decade before it occurred to my competitors to buy Epsilon and Acxiom, we started inventing Omni,” Wren said. (Publicis snapped up Epsilon in 2019, five years after Publicis and Omnicom called off their own megamerger. Interpublic Group of Cos. bought Acxiom in 2018.)
Omnicom racked up $3 billion in net new business wins in the first nine months of 2022 with data-informed media wins for accounts such as Expedia and three Restaurant Brands International chains (Burger King, Popeyes and Tim Hortons).
It nabbed one of the sexiest account wins of the year—the $1 billion L'Oréal media account, picked up from Wavemaker, part of WPP's GroupM. Omnicom scored new business with Kimberly-Clark, Amazon, multiple Johnson & Johnson health brands and more.
“Omnicom pitch and day-to-day teams are compelling storytellers on Omni and its differentiators, much more so than the other holding companies,” said Greg Paull, principal and co-founder of consultancy R3. “They have a clear and concise way of making it easy to understand to clients.”
“Omni is much more than a data platform," said Florian Adamski, CEO of Omnicom Media Group. “It is the core of the connectedness that we have across Omnicom Media Group and really wider Omnicom.”
The tool also allows for creative automation, giving clients the speed to market needed in a real-time advertising world. Paolo Yuvienco, chief technology officer at Omnicom, said its agencies can “templatize” their creative and deliver “500 variations of one ad with a click of the button.”
Last year, the holding company was able to get work into market for its Mercedes-Benz account, an integrated win in late 2021, in just 90 days due to its precision marketing network. This included building global off-shore “experience centers” for all of its marketing needs such as CRM, website updates and performance media, said Luke Taylor, CEO of Omnicom Precision Marketing Group.
The execution appears to be working. “We wanted to not only hand our brief from one agency to the next, but ensure we would lay the foundation of our ongoing transformation ambitions while doing so,” said Bettina Fetzer, VP of communications and marketing at Mercedes-Benz. “From day one this process never felt like separate client and agency talent, but one team working hand-in-hand.”