Omnicom, releasing healthy revenue numbers for the December quarter, noted a surge in its media business as 2023 closed.
Advertising and media, growing 9.3% to $US2.29 billion, was driven by global media performance with the creative side taking a back seat.
Omnicom says media spend had been held back earlier in the year but clients released a “great number” of projects in the last quarter.
And the company expects this to be one of the fastest-growing disciplines in 2024.
The Olympics will also add to revenue in 2024 as will the US elections.
CEO John Wren says the company continues to plan cautiously, given the uncertainties in the macroeconomic and geopolitical environment based on current marketing conditions.
The global advertising group is targeting 2024 organic revenue growth between 3.5% and 5%.
New business won in the December quarter won’t positively impact Omnicom until the March quarter 2024.
Flywheel, a digital commerce business Omnicom acquired for $US835 million late last year, typically has stronger growth in the second half of the year.
Omnicom finished the year on a strong note even though the business environment was uncertain in 2023, says CFO Philip Angelastro. Organic growth for the December quarter was 4.4%.
“As we look towards 2024, we're optimistic about the performance of our agencies and an improving economy,” he told analysts in a briefing.
Steven Cahall, an analyst with Wells Fargo, noted an acceleration in media but a slowdown in creative.
“Do you think that's a change in the way marketers just think about the future of marketing and marketing spend is much more about the delivery than the content?” he said.
Wren replied that technology has probably had a greater impact on the traditional setup of an agency.
“In terms of how we can utilise great ideas and through algorithms and through automation, deliver those ideas to the right venue to present them to reach customers. And so that has an impact," Wren said.
“That in fact, is why we don't separate the two (media and creative) because they feed off each other.
“But I think one of the things that always differentiated us is the quality of our creative products and the quality of our agencies and people that we're able to attract.”
From Omnicom's December quarter results presentation:
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