As we’ve noted before, Sir Martin Sorrell used to say that Omnicom was good at operations but had no strategy, although SMS has been kinder since he quit WPP for S4Capital.
No strategy seems to be paying off as the US market leader posted posted organic growth of 3.5 per cent in Q4 2019 and 2.8 per cent for the year, ahead of analyst’s expectations of around two per cent.
Healthcare was the standout performer with growth of 12.9 per cent, testimony CEO John Wren (below) said, to Omnicom’s Omni in-house data operation and its success at targeting. Wren’s strategy has been to build this in-house resource rather than splashing the cash on data, as Publicis Groupe has done with $4.4bn Epsilon and US rival Interpublic with $2bn Acxiom. Looks like a pretty good strategy from where we’re sitting.
Wren says: “In the face of a dynamic yet challenging environment, I am very pleased that our strategies, talent and execution have allowed us to consistently deliver solid financial results.” No fireworks from Wren, as usual, but what shareholders wanted to hear and the shares rose.
Omnicom has some big wins to plug into 2020, most notably Disney’s global media buying although Disney is reported to have drive a hard bargain on fees. Among its highly-rated creative agencies BBDO has been a solid performer again while TBWA seems to be enjoying a creative renaissance. DDB had a disappointing 2019 – a blow for poster girl CEO Wendy Clark – losing State Farm and most of McDonald’s.
Such ups and downs are par for the course and, over the piece, Omnicom is admirably consistent. It’s a big player in the UK too, showing growth here of 3.3 per cent.