Omnicom's Q4 Organic Revenue Falls 9.6%

Omnicom’s organic revenue fell during the fourth quarter of 2020, marking its third drop in a row due to the effects of Covid-19. Even so, it expects things to start looking up this year. The holding company, which owns agencies including BBDO, DDB and OMD, saw its organic revenue decrease 9.6% during the fourth quarter. In the U.S. specifically, organic growth fell 9.4%. Looking ahead, Omnicom expects the first quarter of 2021 to be challenging. During an earnings call today, CEO John Wren said Covid-19 lockdowns "did not meaningfully impact our operations until mid-March of 2020,” explaining that year-over-year figures in the first quarter will take a hit as a result since the company, for the most part, hadn’t yet felt the economic effects of the pandemic during the same period last year. However, Wren said Omnicom expects to “achieve positive organic growth” for the balance of the year. “At this point, I’m optimistic about the company’s return to growth,” he said on the call. “While we hope the end is in sight, the virus has surprised us, so we must remain vigilant and adaptable in planning and managing our operations.” While the company expects to fare better in 2021 than last year, it’s still expecting cuts in spend from clients. “Overall, while we have a diversified portfolio of service offerings, clients and geographies, demand for our services can be expected to decline as marketers reduce expenditures in the short term due to the uncertain impact of the pandemic on the global economy,” the company said in its earnings report. All of advertising’s holding companies have faced back-to-back revenue hits because of Covid-19. IPG’s organic revenue fell 5.4% during the fourth quarter of 2020, while Publicis Groupe's declined 3.9%. Internal change Wren spent some of Omnicom’s quarterly earnings call pointing to internal successes, including account wins and DEI-related progress. He noted that OMD was recently named Home Depot’s U.S. media agency of record. Wren also highlighted Sanofi’s decision to appoint Omnicom Media Group as its global media agency of record. Additionally, he said the holding company has won a number of vaccine-related assignments. For instance, he said TBWA\Chiat\Day recently worked on Moderna’s first consumer-facing campaign. Philip Angelastro, evp and chief financial officer at Omnicom, said the company as a whole has “won more than our fair share of pitches, and we’re in more as we head into the early part of the year.” Wren also provided an update on Omnicom’s OPEN 2.0 strategy, which was released last summer. The eight-part plan details the steps it’s taking to achieve company-wide “systemic equity.” At the time, Omnicom released its U.S. workforce diversity data, revealing that only 2.7% of its executive managers are Black. According to Wren, since launching the plan, the company has hired DEI leads for each of its networks and practice areas. Last year, Omnicom appointed Emily Graham as its chief equity and impact officer and svp of diversity and inclusion communications. “Our success also requires that people have diverse backgrounds and experiences,” Wren said. “With recent social justice issues, and the disproportionate impact of the pandemic on diverse populations, this has become even more of a priority for us. Additional progress will be made in 2021, and more action items will be executed, measured and considered in our compensation decisions.”

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Omnicom’s Q4 Organic Revenue Falls, but Company Projects Growth for 2021

Remaining 'vigilant and adaptable' is CEO John Wren's goal as Covid-19 uncertainty lingers

Minda Smiley

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