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Omnicom’s revenue climbs 5% in the fourth quarter amid ad growth

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Omnicom, the world’s second largest marketing services company, grew its revenue by $193 million in the fourth quarter to just over $4 billion.

That increase represents a year-over-year growth rate of 5%. Favorable shifts in currency exchange rates contributed to 1.2% to that number, which means Omnicom’s fourth quarter sales gain was slightly lower in practice.

New York-headquartered Omnicom generates its revenue from a large network of subsidiaries that each provide a different combination of marketing services. Some focus on specific fields within the profession such as event marketing. Others offer a broad mix of services, but with a narrow focus or one or few sectors such as the tech industry.

Omnicom’s organic revenue, or revenue minus the contributions of recently acquired marketing agencies, increased by 4.4% in the fourth quarter. For investors, that means the firm’s core business experienced healthy growth. 

Omnicom’s flagship advertising and media business, which helps brands run big-ticket ad campaigns, was its fastest growing unit. The group posted a year-over-year sales improvement of 9.6% in the fourth quarter. This momentum helped offset slight sales declines in Omnicom’s smaller PR and experiential marketing groups.

Broken down by geography, Omnicom’s fee income from clients in Europe jumped 14.1%. The company’s Latin America business was its second largest geographic segment, growing by 13.7%, while the Asia Pacific unit followed in third place with 10.9% growth.

Omnicom boosted expenditures in the fourth quarter to support its revenue growth. The company’s operating costs climbed by a fairly significant $188.7 million, or 5.9%, year-over-year to $3.414 billion. It closed the books on the quarter with net income of $425.7 million.

CEO John Wren told investors in prepared remarks that “looking out to full year 2024, we are set up well with solid fundamentals, tremendous opportunities in digital commerce and retail media from our Flywheel acquisition, and momentum in new business wins. He also promised that “our accelerated investments in analytics and AI will enhance our ability to drive the best outcomes for our clients.”