Omnicom says IPG integration is almost done, $900m savings on track.
Omnicom says its integration of IPG is substantially complete, nearly a year after the deal closed, and that it is on track for $900m in cost savings this year. Third-quarter revenue grew 7.2% organically to $6bn, excluding businesses held for sale.
Chief executive John Wren gave the update on the 22 October earnings call. He said most of the businesses Omnicom had marked as non-core have been sold and the remaining handful should go soon; Marketing Dive notes the process has also involved layoffs. Integrated media grew by more than 10% in the quarter, with new wins including Novo Nordisk's US media buying, and on the same day Coca-Cola moved its North America media to Omnicom while keeping WPP globally. Adweek puts total reported third-quarter revenue at $6.4bn and adjusted EBITDA at $1.1bn, with media accounting for 53% of core operations.
The picture is less rosy on the creative side. Revenue in the advertising segment fell by a mid-single-digit percentage in the quarter. Omnicom lost PepsiCo's global media to Publicis in September, Tyler Turnbull left this month to lead WPP's creative business, and Troy Ruhanen, most recently head of Omnicom Advertising, has retired. Wren said the company does not revolve around any one person. Omnicom also manages $9.9bn of sports sponsorships for clients.
Omnicom did not give a regional breakdown, so there is nothing yet on how the Middle East is performing or how local teams have been reshaped. Adweek's figures also don't fully reconcile on the margin, and the businesses still to be sold weren't named.
In the Gulf the merged group owns networks including OMD, PHD, Impact BBDO, TBWA\RAAD and FP7 McCANN. Clients in Saudi Arabia and the UAE can expect the pitch to lean on combined media scale and data, and should ask what the integration means for the people on their accounts.
Why it matters
The merged group says the disruption is mostly behind it, with media driving growth while creative revenue slips.
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