Omnicom is on a “winning streak” despite uncertain economic conditions, adding more accounts than losing them.
The company, the first of the global advertising groups to release results for the June quarter, is increasing slightly its full year organic growth target to 3.5%-5%.
Omnicom reported organic revenue growing 3.4% to $US3.61 billion in the three months to the end of June.
And the company is on the front foot, looking to take business rather than defend.
“There are a number of pitches which are pretty enticing and exciting for us, and we're hoping to be successful in all but a very few cases,” CEO John Wren told market analysts in a briefing.
“They're offensive for Omnicom, they're not defensive. So we're very secure in our base of revenue and what we can expect.
“And we'll invest whatever new business funds we have to try to continue to outpace others in terms of our ability to win.”
Wren told the analysts he was very pleased with the financial results and progress in key strategic initiatives.
The company is focused on a leading position in generative AI through strategic partnerships and client development and on investing in first-party data, clean room technology and retail media capabilities
“While we remain optimistic for the second-half of the year, we continue to plan cautiously given the number of uncertainties in the macroeconomic environment,” he says.
“We made significant progress on our AI strategy by adding generative AI to Omni, our market-leading technology platform and entering into significant first-of-a-kind technology partnerships.
“We enhanced our capabilities and management team in e-commerce and retail media, solidified our position as the Most Creative Holding Company in the world at Cannes and completed a couple of important strategic acquisitions."
Omnicom’s advertising and media discipline recorded 5.1% organic growth
“If you take 2022, our media group won more new business than the rest of the industry,” he told the analysts. “And that winning streak continues.”
He says client CEOs have been looking for flexibility.
“That doesn't mean that they want to cut back at all on their spend, but they want to have the flexibility to react,” says Wren.
“You see it primarily in the media area where clients held back in terms of their upfront (television) and preserved their rights to enter into the scatter markets as we get later into the year. It's not an election year so they know that inventory will probably be available.”
Wren says Omnicom watches its clients and takes it cues from them
“I believe we're in a very good place, a sound place,” he says. “But as certain clients suffer, we'll go along for a bit of the ride.
“But we haven't lost anything. We've been winning business. So that helps us as well.”
The biggest pause in activity was with the tech and telecommunications sectors.
“We didn't lose any clients in those areas, but they went through some pretty severe restructurings of their own during the first-half and they were conservative about most of our costs,” he says.
Many of the account reviews have been closed.
“We've been fortunate in that we continue to bat I think above average,” Wren says.
“We've had very, very few losses and we've had quite a number of gains … especially in the area of media.”
A slide from the analyst presentation:
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