Omnicom posts 4% organic growth in Q1, beats expectations

Omnicom has announced better-than-expected March quarter results, reporting 4% organic growth revenue.

Revenue soared to $3.6 billion, driven by organic expansion ($136.9 million, up to 4%). The strategic $900 million acquisition of Flywheel Digital in October 2023 contributed to a 1.5% boost. This will potentially allow the agency group to tap into the global digital commerce market—estimated to be worth $7 trillion by 2025—and combine Flywheel’s retail media capabilities with Omnicom’s data unit, Omni.

Flywheel has about 2,000 staff and works with about 4,500 brands to sell goods more efficiently across hundreds of digital marketplaces. According to the company, the Flywheel Commerce Cloud platform “manages tens of billions in product sales and billions of advertising spend annually across digital marketplaces”, such as Amazon, Walmart, and Alibaba.

Omnicom chairman and chief executive John Wren attributed the result to continued strength in advertising, media, and precision marketing disciplines.

Organic growth by discipline and region

The top line gained from organic growth in advertising and media, precision marketing, experiential, and healthcare:

Below is a simplified breakdown of organic growth by discipline in Q1 compared to the first quarter of 2023:

• Advertising and media: Grew by 7%
• Precision marketing: Gew by 4.3%
• Experiential: Grew by 9.5%
• Healthcare: Grew by 2.1%

However, there were decreases in:

• Execution and support: Fell by 4.3%
• Branding and retail commerce: Fell by 3.8%
• Public relations: Fell by 1.1%

Regional

• Asia Pacific: Increased by 3%
• United States: Increased by 4.3%
• Euro markets and other parts of Europe: Increased by 3.5%
• Latin America: Increased by 22.3%
• United Kingdom: Increased by 3.2%
• Other North America: Increased by 1.1%
• Conversely, the Middle East and Africa saw a decrease of 4.2%

At Omnicom, Wren told analysts the company was playing defence sparingly this year, leaving room for big wins on the horizon.

“Our industry-leading tools and platforms, combined with the strength of our operating leadership, has led to our excellent new business performance and, when combined with the new opportunities we are pursuing, give us great confidence in the future," said Wren in a prepared statement.

Wren emphasised that the network's recent business wins, the Olympics, and the US elections contribute to a positive 2024 outlook for the company.