Omnicom puts 'Mad Men' era legacy behind it with homegrown precision marketing expertise

Omnicom Group agencies once personified the golden age of advertising, such as Bill Bernbach's Doyle Dane Bernbach and the shop once known as Batten, Barton, Durstine & Osborn. But the Omnicom of today is a much different place—while still creative, it's a data-driven powerhouse enabling marketers to transform their businesses using its capabilities in e-commerce, consumer experience management, CRM and more. “Of our top 500 relationships where we service clients with multiple offerings, somewhere in that mix there is an advertising component," said John Wren, chairman-CEO of the holding company, in an interview. "Twenty years ago, the advertising component would've been much larger than it is today,” he noted. “But it hasn't disappeared. It's still an integral part of that engagement.” See all of Ad Age's 2023 Agency A-List winners here 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. Buy your ticket for the Ad Age A-List & Creativity Awards Gala here. Omni present 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.” Mercedes blends 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.” Last year, Omnicom added to its arsenal Transact, a dedicated practice focused on commerce consulting and e-retail services. The new unit played a key role in securing wins such as L'Oréal’s media business. “A key way that Transact was able to support was to provide specific expertise on how brands in the L'Oréal portfolio can win on channels like Amazon,” said Frank Kochenash, CEO of Transact. “That certainly included a high level of specialist approach on paid search and performance display on the channels.” Omnicom also took on partnerships with Instacart, Kroger and Walmart in 2022 to give the company access to online and in-store transaction and audience data. Business transformation While agencies like DDB and BBDO don’t hold the same mystique that they once had, they still service large clients like Mars Wrigley, McDonald's, Bacardi and Volkswagen. The holding company also has agencies like TBWA\Worldwide and Goodby, Silverstein & Partners, which have become known for more than just great creative. Goodby’s Brand Camp, for example, has been cited for its business transformation work. In fact, Omnicom was named the most effective agency holding group by the Effies last year. One indication of Omnicom’s client integration: The company’s 100 largest clients in 2022 were served, on average, by about 54 of its agencies, according to Omnicom’s latest annual regulatory filing. (Omnicom overall has more than 5,000 clients in more than 70 countries.) Omnicom is by no means alone in making a play for business transformation, a booming area where legacy agency holding companies and major consulting firms all tout their credentials to clients. Such services conceivably could help insulate Omnicom and its holding company rivals from a potential advertising downturn and recession because, the theory goes, marketers need to be addressing business transformation in good times and bad. Investors like what they’re seeing at Omnicom. The stock price reached an all-time high Feb. 8, one day after the company reported solid fourth-quarter results. Wren said creativity has been redefined due to more targeted advertising and campaigns having a “shorter shelf life.” Today’s marketing is more about providing integrated solutions for clients like Apple, AT&T and PepsiCo, the last of which currently has over 100 Omnicom agency offices working on the brand. Succession Wren, who is 70 years old and will be inducted into the American Advertising Federation’s Advertising Hall of Fame next month, has been CEO since 1997, back when Google and Facebook didn’t exist, Amazon was a startup and Apple was floundering. Omnicom in late 2021 named longtime Omnicom Media Group chief Daryl Simm as president and chief operating officer, making Simm a contender to run the company. (Wren was appointed president about a year before he took over as CEO.) Wren won’t say when he might hand off Omnicom to a successor, but said, “I have an obligation to make sure that whoever I leave it to, knowing full well that they're going to do it their way, they're not going to do it my way, that it continues to be successful.” See all the winners of Ad Age's 2023 A-List Awards here.

Omnicom puts 'Mad Men' era legacy behind it with homegrown precision marketing expertise

Featured Stories