• by Joe Mandese  @mp_joemandese, July 19, 2023

At a time when Hollywood’s writers and actors have been looking for support from Madison Avenue in their labor action against the studios for better terms and protections against AI, Omnicom CEO John Wren late Tuesday said his holding company is not taking sides.

“I hope this ends more quickly than it’s predicted to end, but we remain completely agnostic to any form of media,” Wren said in response to an analyst’s question about whether the strikes could potentially benefit Omnicom.

Wren then went on to imply that should the Hollywood talent strikes impact TV and streaming advertising, Omnicom is prepared to shift its clients’ budgets into other media.

“With the technology and the database and the collection of information that we have -- married with clients’ first-party data -- we’re able to create other ways to attract audiences,” he said, adding, “If one road closes down, even temporarily, we know how to go down the other road.”

The statement likely was the first indication of a major agency holding company’s position on the Hollywood strikes -- and it was clear that it is a media-neutral one, albeit with contingency planning if it begins to impact the supply of audience impressions.

While Wren did not explicitly state what other media might be included in his “other road” scenario, the Omnicom chief spent much of his time on the holding company’s earnings call talking about its acceleration of the adoption of AI -- one of the big issues raised by Hollywood’s unions going forward -- and especially Omnicom’s “first-mover” acceleration of generative AI into its homegrown Omni platform.

Wren provided a list of the number of partners Omni already has integrated with (see graphic below), and said it was both Omni’s “open architecture” as well as the company’s privacy and safety policies that have attracted generative AI developers to integrate with Omni before other holding companies.

He said he expected that early-mover advantage to end soon, but added that Omnicom already has a running start on expanding the technology beyond creative ideation and execution into explicit marketing disciplines, and implied that Omnicom already is developing APIs -- or application protocol interfaces -- to implement them.

“We’ll be creating APIs for CRM, for commerce, for PR. Across the board,” he disclosed.

In terms of the overall impact that the Hollywood strikes will have on the advertising industry, most holding companies have been quiet on the topic, but an important source of media economics data recently issued projections that it already is contributing to advertising price deflation.

“We are forecasting that linear TV pricing will deflate by 1.9% in 2023,” Fredrik Kinge, Global CEO of ECI Media Management, writes in the firm’s second quarter 2023 media inflation report.

“This is a significant adjustment compared to our Q1 report, in which we forecast that TV pricing would inflate by 6.6%,” Kinge adds, citing the Hollywood strikes as chief among them.

“There are several factors at play here: economic factors including banking volatility, corporate budget cuts and strategy shifts; and the [Writers Guild of America] WGA, which will impact on TV programming, particularly if it is prolonged.”

Specifically, ECI projected that the writers’ strike would likely lead to a “short-term contraction of premium scripted content” and that the brunt of the deflationary effect would be felt mostly in the network TV scatter advertising marketplace this year.

The report was written and published before the Screen Actors Guild joined the Hollywood labor action, and the strikes currently are expected by many to be prolonged.

In a follow-up interview with MediaPost following the release of the report last month, ECI U.S. Vice President Colin Linggo said he believed this would be the first TV advertising price deflation to occur since the last major Hollywood writers’ strike – the 154-day long one that took place in 1988.