Tax and account losses hammer Omnicom

Omnicom – the owner of BBDO, DDB, TBWA and media operation OMG – has reported a mixed bag of results for 2017.

Net income fell 27.4 per cent in Q4 to $254.4m from $350m the year before, which the company blames largely on Trump administration tax changes. Over the year it fell 5.5 per cent to $1.1bn.

The company has also lost business. CEO John Wren says: “In the US several of our ad agencies, and in particular our independent brands, experienced client losses earlier in 2017, that are still cycling through and will continue to do so in the first part of 2018.”

Some of these agencies may be sold as Omnicom has been reviewing its rambling empire recently.

On the plus side Omnicom claims organic growth for the year of three per cent, slightly behind US rival Interpublic but ahead of France’s Publicis Groupe. Advertising increased 1.2 per cent, CRM 3.4 per cent and public relations 0.1 per cent while healthcare decreased 1.9 per cent.

By region organic growth in 2017 was 0.6 per cent in North America, 5.1 per cent in the UK, eight per cent in Europe, 5.8 per cent in Asia Pacific, 0.6 per cent in Latin America and 12.5 per cent in the Middle East and Africa.

During the year the company reorganised its CRM operations, reflecting their greater importance in the holding company scheme of things as agencies try to compete with management consultancies for customer “experiences.”

Omnicom didn’t have a happy Christmas with organic growth in the US and UK falling back by 0.8 per cent in both regions. In the UK this probably reflects slimmer pickings for big guns AMV BBDO and adam&eveDDB.

Both Interpublic and Publicis reported strong fourth quarters.

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