Omnicom Off To A Good Start With 4% Q1 Growth

Omnicom posted 4% organic growth in the first quarter on reported revenue of $3.63 billion. The company altered its outlook slightly for the year indicating that it now expects organic growth to be in the 4% to 5% range versus the earlier estimate of 3.5% to 5%. 

The company noted that recent business wins, the Olympics and U.S. political advertising support its 2024 outlook. 

Q1 organic growth drivers included the company’s advertising and media division, which was up 7% (with media being the driver as creative agencies were roughly flat) and experiential marketing, up 9.5%. Precision Marketing, which now includes retail and commerce operation Flywheel, acquired last year, was up 4.3%. 

The company didn’t break out growth figures for Flywheel specifically, but Omnicom CEO John Wren told analysts that the company believes it will be a double-digit growth business for the foreseeable future, and that the Precision Marketing discipline would be one of the firm’s fastest growing segments.  

Flywheel, added Wren, constitutes “the only fully integrated retail commerce cloud out there,” that will provide clients with insights about how people transact online commerce around the world.  

Once the integration of Flywheel and the company’s operating system Omni is complete, said Wren, Omnicom will have identity, brand and audience-building capabilities and ecommerce sales data built into a single platform. “No one else can do that.”  

Growth was partially offset by declines in execution and support, branding and retail commerce and PR.  

Organic growth in the U.S., which accounts for 53% of company revenue, was 4.3%. All other regions posted gains except for the Middle East & Africa which posted a 4.2% decline.  

Asked about M&A activity, Wren replied that the firm will continue to flesh out capabilities in martech, automation and content production. That said, no deals of the Flywheel magnitude ($835 million) are currently anticipated. 

Asked about the main benefit of generative AI, Wren said it’s a tool for creatives to execute ideas and messaging across many different media. With Gen AI tools, he added, ideas “succeed fast or fail fast.”  

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