The usually sure-footed Omnicom let the side down somewhat in the second quarter of coronavirus-blasted 2020, seeing its revenue decline by 23 per cent and organic “growth” fall sharply in all regions: 21% in the US, 24% in the UK, 29% in Europe, 24% in Latin America and 18.6% in Asia Pacific.
The ad holding company is heavily exposed to top-end creative advertising (its networks include BBDO, DDB and TBWA) but media also appears to be a problem, seemingly including a number of losing bets in its programmatic business through so-called principle-based buying options for clients.
CFO Phil Angelastro (left) said: “If a client is focused on achieving a particular ROI or metric.they choose a bundled product. We deliver that bundled media for a fixed price, and the risk of delivering at that price, for better or worse, we bear.”
Omnicom is cutting 6100 jobs and says it believes Q2 was the nadir. Angelastro says: “We will continue to actively manage our costs to ensure they align with our revenues. We want and expect our people to be realistic about their forecasts.”
There are no details about where the axe fell but its previously all-conquering UK agencies – adam&eveDDB and AMV BBDO – will be feeling the pain too.
Over the years Omnicom, helmed by John Wren, has probably been the best managed of the holding companies (overtaking WPP as the biggest by market value) but these numbers aren’t good. The opaque doings in its programmatic media operation will worry some investors.