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About The Promotion Network 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 clients through its agency networks BBDO Worldwide, DDB Worldwide, and TBWA Worldwide. Agencies such as OMD, PHD, and Hearts & Science comprise the Omnicom Media Group, which provides end-to-end, data-driven media services. Omnicom's Diversified Agency Services division includes 200 companies providing customer relationship management (CRM) as well as branding and research, events, and public relations. The US accounts for about 50% of sales.

 

Operations

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

Advertising accounts for about 55% of Omnicom's total revenue. It includes creative services as well as strategic planning and data analytics.

The CRM segment, which accounts for nearly 30% of revenue, consists of two units, CRM Customer Experience and CRM Execution & Support. CRM Consumer Experience includes Omnicom Precision Marketing Group and digital/direct marketing agencies as well as 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, including corporate communications and crisis management, generate about 10% of sales, while Healthcare-focused marketing and communications provides about 7%.

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. 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 more than 60 Omnicom agencies.

By industry, food and beverage companies along with pharmaceutical and healthcare firms account for the largest share of customers, with each contributing 15% of the company's total revenue. Omnicom serves other notable industries, including consumer products, technology, financial services, and the auto industry, each accounting for nearly 10% of sales.

Financial Performance

While Omnicom's net income held steady throughout the most recent five-year period ending in 2018, the company struggled to meaningfully grow its revenue. Challenges include technological disruption from online advertising competitors such as Google and Facebook, and changing consumer behavior complicating the marketing environment.

In fiscal 2018 revenue was $15.3 billion, representing less than 1% growth from the prior year. Organic revenue growth from advertising, PR, healthcare, and consumer experience services was offset by revenue decreases related to disposals of some of its businesses (primarily in CRM Execution & Support), a negative foreign exchange rate, a decrease in acquisition revenue, and the adoption of new accounting standards at the start of 2018.

Net income grew slightly to $1.4 billion in 2018, up from $1.2 billion in 2017. Omnicom benefited from a decreased income tax rate and a decrease in operating expenses.

 

Cash at the end of 2018 was $3.7 billion. Cash from operations was $1.7 billion, while investing activities used $221.8 million. Financing activities used $1.4 billion.

Strategy

Omnicom has shifted focus toward high growth digital marketing to better compete with Google and Facebook. To this end, the company sold about 20 businesses as it moved to dispose of non-core assets, cutting a total of 8,400 positions in Q3 of 2018.

Also in 2018 it rolled out its data and analytics platform, Omni. The online marketing tool is designed to be a user-friendly one-stop-shop for all Omnicom agencies and clients to plan and create ad campaigns using data from third parties. Users log into Omni to plan and buy media, store customer information, and track customer sales and other actions.

 

Mergers and Acquisitions

In 2018, Omnicom acquired Credera, a Dallas-based management and IT consulting firm. Credera helps clients such as Southwest Airlines and Chili's with various consulting services, including implementing technology for marketing programs and e-commerce. 

Another purchase earlier that year was Elsevier's Japanese Pharma Communications business. Pharma Communications delivers medical content for promotional materials and educational programs directed at doctors and patients. Omnicom made the purchase to grow its EMC K.K. healthcare marketing communications agency.

Also in 2018 Omnicom acquired Virginia-based 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.

Company Background

Omnicom Group was created in 1986 to combine three leading ad agencies — BBDO Worldwide, Doyle Dane Bernbach Group (DDB), and Needham Harper Worldwide — into a single group capable of competing in the worldwide market.

BBDO Worldwide, founded in New York in 1928 as Batten, Barton, Durstine & Osborn, had a huge PepsiCo account and developed the Pepsi Generation campaign.

Doyle Dane Bernbach Group (DDB), which had created the fahrvergnügen ads for Volkswagen, had strong ties in Europe.

Needham Harper Worldwide, which had served up the "You Deserve a Break Today" commercials for McDonald's, had connections in Asia.

Omnicom was established as holding company of independent operating units working together to gain scale.

The Promotion Network Inc

1999 BRYAN ST STE 3000
Dallas, TX 75201-6820
Phone: 1 (214) 692-1522

Stats

Employer Type: Privately Owned
Senior Vice President: Manolo Almagro
Pres: Rich Feitler
Account Director, Digital: Danielle Peiffer
Employees (This Location): 120
Employees (All Locations): 200

Major Office Locations

Dallas, TX

Other Locations

Rogers, AR
Los Angeles, CA
San Francisco, CA
Chicago, IL
New York, NY
Austin, TX