The New Flywheel In Omnicom's Ointment

Omnicom Wednesday announced it was named a "leader" in a recently released Forrester Research analysis of "commerce services," scoring high on a wide variety of criteria, but especially on AI and data, which Forrester's analysts attributed mainly to the holding company's nearly billion dollar acquisition of Flywheel Digital from Ascential plc earlier this year.

But according to executives familiar with Flywheel, the prized asset could also be a potential liability.

Among other things, Ascential bundled its 2020 acquisition of China's Yimian Data into the deal, which comes at a time when the U.S. government is looking askance at U.S. companies doing business with China that might give the Chinese government access to potentially sensitive data and consumer influence.



Not long after Omnicom completed its acquisition of Ascential's commerce assets, President Joe Biden signed Executive Order (EO) 14117 titled “Preventing Access to Americans’ Bulk Sensitive Personal Data and United States Government-Related Data by Countries of Concern.”

In March, the U.S. Department of Justice’s (DOJ) National Security Division announced an Advanced Notice of Proposed Rulemaking outlining contemplated implementing regulations for President Biden's executive order.

Both actions already are beginning to have a profound impact on the ad industry, as well as its media, data and technology providers.

This morning, MediaPost reported that in response to those actions, Microsoft already is urging its employees to transfer out of China.

"The newly integrated business generates an exciting new proposition for companies looking to grow their digital commerce business, whether they are looking to tap into the growth of China, across APAC or all global markets," Duncan Painter said in 2020 when he completed the Yimian acqusition as CEO of Ascential and integrated it into Ascential's other digital data and commerce assets.

After selling those assets to Omnicom, Painter joined the holding company as CEO of its Flywheel Digital division.

MediaPost named Omnicom as our holding company of the year largely because of its acquisition of Flywheel -- especially its data assets, which Painter previously disclosed collects data "for all the trading, media, inventory, supply chain across-the-board -- customer satisfaction -- of the top 80 marketplaces in the world."

"The addition of Flywheel established Omnicom as one of the world's largest buyers of retail media and solidified Omnicom's position as a global leader in end-to-end commerce experiences across hundreds of retailers and digital marketplaces, including Amazon, Walmart, Target, Alibaba, and more," Omnicom said in its Forrester Research announcement on Wednesday.

It also quoted Forrester's notation that Omnicom "has acquired its way to a dominant position in the market, bringing Flywheel Digital and Credera into its marketplace platform and technology services to offer managed services for commerce operations and technology. Its enhanced portfolio keeps creativity and content at the core, but it's now strengthened with more data and performance-based experiences."

It's unclear exactly what Omnicom's potential liability would be under the new executive order, because a provision in the DOJ's proposed rule would make ecommerce marketplaces exempt in terms of exchanging personal financial data, as well as personal identifiers related to the purchase of goods and services.

However, as part of its "risk assessment," the DOJ said it is weighing bulk thresholds for consumer data falling under the following categories:

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