Omnicom Group Inc. at a Glance

Uppers

  • A worldwide company with over 5,000 clients in over 100 countries
  • Many opportunities for women and minorities

Downers

  • Lack of unified vision between various agencies
  • Lack of communication and collaboration between its different units

The Bottom Line

  • Omnicom is a kind of omnibus--a large global company with many separate divisions that are still working on communicating and collaborating with each other.

About Omnicom Group Inc.

Omnicom Group creates advertising that is omnipresent. The company ranks as the world's #1 corporate media services conglomerate, with 1,500 agencies across 100-plus countries conducting advertising, marketing, and public relations operations. It serves global advertising clients through its agency networks BBDO Worldwide, DDB Worldwide, and TBWA Worldwide, while such firms as GSD&M, Merkley + Partners, and Zimmerman Advertising provide services for regional and national clients. Its Diversified Agency Services division, including Fleishman-Hillard, Integer, and Rapp, provides public relations and other marketing services.

Operations

Omnicom is active in four primary disciplines: Advertising, Customer Relationship Management (CRM), Public Relations, and Healthcare.

Advertising accounts for more than half of Omnicom's total revenue.

The CRM segment consists of two units, CRM Customer Experience & CRM Execution & Support. CRM Consumer Experience consists of Omnicom Precision Marketing Group's digital/direct marketing agencies, as well as its branding, shopper marketing, and experiential marketing agencies. CRM Execution & Support carries out field marketing, sales support, merchandising, and point of sale, as well as other specialized marketing and custom communications services.

Public Relations services generate around 10% of sales, while Healthcare marketing and communications focused segment provides around 5%.

Geographic Reach

Omnicom has principal corporate offices in New York, Connecticut, and Florida, while it has international offices in London, Shanghai, and Singapore. The group's network of agencies serves some 5,000 clients in more than 100 countries. About 60% of the company's revenue comes from the Americas, while EMEA (Europe, Middle East, and Africa) contributes around 30%. The remaining 10% or so comes from the Asia-Pacific region.

Sales and Marketing

As a leading global advertising, marketing, and corporate communications company, Omnicom has a large and diverse client base, and often several Omnicom agencies will serve the same client concurrently. None of its clients account for more than 5% of revenue, while its top 100 clients account for a little more than 50% of revenue and are served on average by 50 Omnicom agencies.

By industry served, food and beverages provides the most custom at nearly 15% of sales. Other notable industries include pharmaceuticals and healthcare, consumer products, and the auto industry, each accounting for around 10% of sales.

Financial Performance

Omnicom has struggled to meaningfully grow its revenue over the past four years. In fiscal 2017 sales decreased 1% to $15.3 billion as the sale of the its specialty print business was mostly offset organic revenue growth and the positive effect of currency movements.

Net income has likewise proven fairly static of late, and in fiscal 2017 it declined 5% to $1.1 billion, comparable with recent averages. Much of the fall was accounted for by the 2017 US Tax Cuts and Jobs Act, which added $106.3 million to net income tax expense.

Cash from operations grew 4% to $2.0 billion due to changes in taxation and an increase in operating capital, partially offset by lower net income.

Strategy

Omnicom's fortunes have been buoyed in part by its agency networks and their consistently strong creative work (traditional media advertising accounts for almost half of its revenue), but the bulk of its growth has traditionally come from such areas as customer relationship management (CRM) and specialty communications. To better serve the increasing scope of its CRM business, in 2017 Omnicom split its CRM activities into two separate units, CRM Consumer Experience and CRM Execution & Support. It also recognized the increasing importance of Healthcare by realigning the former specialty communications segment as a healthcare-specific segment.

Omnicom sees continued growth being tied to its ability to provide an ever-expanding menu of services to its largest clients, especially in the digital and social media arenas. The company has also been focused on expanding its media planning and buying operations.

Mergers and Acquisitions

In March 2018, Omnicom agreed to acquire Elsevier's Japanese Pharma Communications business. Elsevier is part of RELX Group. Pharma Communications engages in the delivery of medical content for promotional materials and educational programs directed at doctors and patients.

In February that year, Omnicom acquired Snow Companies, a full-service patient engagement agency that focuses on direct-to-patient (DTP) communications, marketing, education, and patient research initiatives. It primarily serves major pharmaceutical and biotech companies.

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Omnicom Group Inc.

437 Madison Ave
New York, NY 10022-7001
Phone: 1 (212) 415-3600

Stats

  • Employer Type: Public
  • Stock Symbol: OMC
  • Stock Exchange: NYSE
  • President and CEO: John D. Wren
  • Vice Chairman; Chairman, Asia Pacific: Serge Dumont
  • President and CEO: John D. Wren
  • 2017 Employees: 77,300

Major Office Locations

  • New York, NY

Other Locations

  • Rogers, AR
  • Irvine, CA
  • Long Beach, CA
  • Los Angeles, CA
  • Pasadena, CA
  • Roseville, CA
  • Sacramento, CA
  • San Francisco, CA
  • Venice, CA
  • Walnut Creek, CA
  • Westlake Village, CA
  • Lakewood, CO
  • Darien, CT
  • Stamford, CT
  • Wilton, CT
  • Washington, DC
  • Coral Gables, FL
  • Fort Lauderdale, FL
  • Miami, FL
  • Miami Beach, FL
  • Tampa, FL
  • Atlanta, GA
  • Kennesaw, GA
  • Chicago, IL
  • Mount Prospect, IL
  • Oak Brook, IL
  • Indianapolis, IN
  • Boston, MA
  • Rockville, MD
  • Detroit, MI
  • Troy, MI
  • Minneapolis, MN
  • Kansas City, MO
  • Saint Louis, MO
  • Helena, MT
  • Charlotte, NC
  • Greensboro, NC
  • Raleigh, NC
  • Edison, NJ
  • Jersey City, NJ
  • Trenton, NJ
  • Westfield, NJ
  • Albany, NY
  • Collegeville, NY
  • Garden City, NY
  • Syracuse, NY
  • Cincinnati, OH
  • Columbus, OH
  • Harrisburg, PA
  • Pittsburgh, PA
  • Nashville, TN
  • Austin, TX
  • Dallas, TX
  • Houston, TX
  • Irving, TX
  • Midvale, UT
  • Seattle, WA
  • Kenosha, WI
  • New Berlin, WI
  • Sturtevant, WI
  • Brasilia, Brazil
  • Rio De Janeiro, Brazil
  • Calgary, Canada
  • Edmonton, Canada
  • Halifax, Canada
  • Montreal, Canada
  • Montréal, Canada
  • Ottawa, Canada
  • Toronto, Canada
  • Vancouver, Canada
  • Westmount, Canada
  • Winnipeg, Canada
  • Santiago, Chile
  • Santo Domingo Oeste, Dominican Republic
  • Düsseldorf, Germany
  • Bengaluru, India
  • Chennai, India
  • Gurgaon, India
  • Mumbai, India
  • New Delhi, India
  • Pune, India
  • Milano, Italy
  • Roma, Italy
  • Fukuoka, Japan
  • Hiroshima, Japan
  • Kitakyushu, Japan
  • Kyoto, Japan
  • Minato-Ku, Japan
  • Nagoya, Japan
  • Naha, Japan
  • Osaka, Japan
  • Sapporo, Japan
  • Shimonoseki, Japan
  • Yokohama, Japan
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