Home Agencies Omnicom Sees Long-Term Risks In Owning A Data Company

Omnicom Sees Long-Term Risks In Owning A Data Company


Omnicom does not intend to buy a data company, even after Publicis Groupe bought Epsilon ($4.4 billion), IPG bought Acxiom ($3.2 billion) and Dentsu Aegis bought Merkle ($1.5 billion).

Omnicom steadfastly believes that owning a data company would compromise its neutrality when serving advertisers.

“Our systems have always been open and unbiased,” CEO John Wren told investors on the company’s Q2 earnings call Wednesday. “We think that’s critical for us to get the best results for our clients.”

Omnicom has taken a different path from Publicis, IPG and Dentsu. It began investing in data and analytics 10 years ago via its data and tech group Annalect, which was recently dispersed into Omnicom’s agency brands. Last year Omnicom launched a platform that lets agencies plan and buy media around the customer journey, and it continues to invest in talent to run those platforms, said holding company CFO Phil Angelastro.

He added that despite those investments, Omnicom hasn’t spent nearly what Publicis and IPG paid for Epsilon and Acxiom respectively.

Investing in internal solutions also adheres to Omnicom’s long-standing philosophy of renting vs. owning tech and data. By operating neutrally, Omnicom gives clients the flexibility to work with the systems and data providers they want and switch easily as the ecosystem evolves.

“We don’t need to own [data] to connect to data on behalf of our clients,” Wren said.

And while holdco competitors claim owning a data company will protect clients from upcoming privacy regulation, Omnicom sees it as a long-term risk.

“I can’t foretell what the risk is going to be with data, and what the regulations are going to be in the United States, let alone China or anywhere else,” Wren said. “As we looked at the risk vs. our ability to obtain the same data, there was no ROI on the transactions for us.”

Wren also pointed to a “huge integration risk” with Epsilon and Acxiom, and alluded to Publicis’ rocky merger with Sapient.


AdExchanger Daily

Get our editors’ roundup delivered to your inbox every weekday.

“You’ve seen other companies in our industry that have done very large acquisitions for their size and have not been able to integrate them within a relatively short period of time,” Wren said.

While competitors find ways to integrate large data companies into their agency networks, Omnicom will continue to invest in its internal systems and work with client first-party data.

“The data [that those companies have] pales in comparison to the quality of data clients have on their own,” Wren said. “It gets people excited because there’s a headline, but when you get to the substance of it, we think, god bless them, but it’ll be a challenge.”

Overall Omnicom grew 2.8% organically in the quarter to $3.7 billion, with worldwide revenues decreasing 3.6% year over year. Advertising, health care and CRM customer experience groups performed well, while PR and CRM execution and support, which includes disciplines like events and field marketing, continued to lag.

Must Read

Nope, We Haven’t Hit Peak Retail Media Yet

The move from in-store to digital shopper marketing continues, as United Airlines, Costco, PayPal, Chase and Expedia make new retail media plays. Plus: what the DSP Madhive saw in advertising sales software company Frequence.

Comic: Ad-ception

The New York Times And Instacart Integrate For Shoppable Recipes

The New York Times and Instacart are partnering for shoppable recipe videos.

Experian Enters The Third-Party Data Onboarding Business

Experian entered the third-party data onboarder market on Tuesday with a new product based on its Tapad acquisition.

Privacy! Commerce! Connected TV! Read all about it. Subscribe to AdExchanger Newsletters

Albertsons Takes Its First Steps Into Non-Endemic Advertising, Retail Media’s Next Frontier

Albertsons is taking that first step into non-endemic advertising next week via a partnership with Rokt to serve ads to people who have already purchased groceries.

Marketecture Buys AdTechGod (No, Really)

Marketecture has acquired AdTechGod – an anonymous ad tech Twitter poster turned one-man content studio – and the AdTech Forum, an information resource hosted by AdTechGod and Jeremy Bloom.

Why The False Advertising Lawsuit Against Poppi Is Bad News For RMNs

This week’s dispatch explores the new trend of false advertising class-action suits in the food and CPG industry and how the evolution of online, data-driven retail media could exacerbate the problem.