Boardroom Insight

Consulting Sector News and Trends

Omnicom’s top line grows 5.2% in its fiscal first quarter

Omnicom, one of the world’s most profitable advertising agencies, has shared financial results for its fiscal first quarter.

Omnicom’s fee income climbed 5.2% from a year ago during the quarter to $3.443 billion. Its adjusted operating income was $465.7 million, a figure that excludes a fairly large $119.2 million bill related to adjustments in its real-estate portfolio.

New York-headquartered Omnicom is a member of the ad industry’s so-called Big Four. This is the group of four leading marketing agencies dominates the sector’s revenue rankings.

Omnicom, like the other companies in the Big Four club, is organized as a holding company. It operates five subsidiaries that in turn own hundreds of marketing agencies around the world.

Some of the marketing agencies in Omnicom’s portfolio focus on specific industries such as manufacturing and technology. Others have hundreds of clients in dozens of verticals.

Omnicom’s fastest-growing business in the fourth quarter was its experiential marketing group, which experienced 8.4% year-over-year sales growth.

Experiential marketing is a fairly broad term that covers offline marketing methods such as events and pop-up stores. The term also covers other client acquisition practices, such as certain types of social media campaigns.

The second fastest unit within Omnicom was its precision marketing practice. That practice, which achieved 7% year-over-year revenue growth, collects detailed customer buying data to create highly personalized ads.

Omnicom also breaks down its revenue by geography to help investors understand how its international units are doing. The company recorded 5.1% revenue growth in the U.S. and 5.9% in the U.K. during the first quarter.

Worldwide, Omnicom has more than 5,000 clients in about 100 countries. Its customer roster includes numerous members of the Fortune 500. 

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