Omnicom’s integration of Interpublic Group is “substantially completed” nearly a year after the acquisition — the largest ever in the agency space — was set into motion, Omnicom CEO John Wren said on an earnings call Thursday. The combined company is on track to realize its planned $900 million cost savings this year, a process that has involved layoffs and the sale of what Omnicom describes as noncore assets.
“Major progress has been made in divesting the businesses we identified as not core to our future,” Wren said on the call with investors. “We expect to complete the remaining handful of dispositions in the near term.”
The ad-holding group’s revenue grew 7.2% year over year on an organic basis in the third quarter to $6 billion when stripping out the performance of assets held for sale. Integrated media led the way in Q3 with growth of over 10%, momentum that was reflected in new client wins, including Novo Nordisk’s media buying in the U.S. Omnicom underscored its management of $9.9 billion in sports sponsorships, an area that paid off around the World Cup and is expected to bolster the group for the 2028 Olympic Games.
The Coca-Cola Company on Thursday also announced it was handing Omnicom its media duties in North America. Omnicom recently lost PepsiCo’s global media business, an account it handled for decades, to rival Publicis Groupe.
When asked by investors about the news, Wren deferred comments to Coke. The executive said pitch activity is healthy overall and that any accounts expected to go into review have mostly done so in the first nine months of the year, a period that saw 5.8% organic growth. Omnicom executives have previously expressed disappointment in losing PepsiCo, which Publicis won without a traditional pitch. Publicis had been handling Coke’s media and data business in North America since last year.
Omnicom has recently seen some high-profile executive departures around its creative division. Tyler Turnbull, a key figure at FCB and then McCann, left to lead WPP’s creative arm earlier this month. Before that, Troy Ruhanen, a company veteran who most recently served as president and CEO of Omnicom Advertising, retired. Revenue for Omnicom’s advertising segment declined in the mid-single digits in Q3.
“There's no one key individual in this company that the company revolves solely around,” Wren said in response to an analyst question. “Everybody is replaceable and we anticipate and have succession plans for all of our key positions throughout the company, so when something like that happens, we're able to react to it very smoothly. And that's what's occurred in the advertising group.”
