Programmatic continues to help more than hurt the agency conglomerates, or at least it has for the largest US holding company Omnicom Group.
Omnicom continues to see notable growth from its trading desk, although the growth rate has slowed. The company’s Accuen exchange-buying unit delivered an incremental $25 million in spending growth during the third quarter, up from $40 million one year ago.
That slower growth is in line with Omnicom’s expectations of a maturing programmatic ad market, CFO Philip Angelastro told investors during the company’s earnings call.
Given that Accuen’s 2014 programmatic revenue surpassed $140 million and Q3 is a seasonally soft quarter, the holding company’s 2015 total programmatic revenue could easily surpass $300 million.
CEO John Wren shrugged off a question from Wells Fargo analyst Peter Stabler about the negative impact of clients bringing media buying in-house as a result of the easy access to exchange-buying tools and other technologies.
“With respect to programmatic … even with clients who have taken certain aspects of this in-house, we sit beside them and we do other things,” Wren said. “That concern is true, but advertisers have taken various functions in house for a very long time. We’ve lived with that situation and it has not impacted our opportunity to grow in other areas or to collaborate with them on areas they’ve decided to take in-house.”
Wren spoke briefly about the ongoing client media reviews that have roiled the agency world for the past six months. He noted Omnicom has declined to participate in several reviews, including those of Citibank, Coca-Cola and L’Oréal. It has also won some media assignments from SC Johnson, Bacardi and Wells Fargo in the United States.
In discussing the reviews, Wren gave a shout out to Omnicom’s Annalect analytics division.
“Annalect played key role in each of our wins,” he said. “We picked up a significant share of business in digital. It’s truly a differentiating asset for us.”
Omnicom’s global revenue in the quarter shrank 1.1% to $3.7 billion, largely due to negative impacts of foreign exchange rates. Organic revenue growth was 6.1%, led by strong US and European markets. Revenue slowed or decreased in China and the Latin America region, the latter because of weakness in Brazil.
