Did We Mention Annalect? Omnicom CEO Wren Offers Publicis Merger Update

omnicom-wrenThe lawyers may be scurrying and the deal fees mounting, but Omnicom and Publicis are still on track to complete their $35 billion megamerger by early 2014.

The companies are making slow but steady progress on achieving regulatory approval for the deal, Omnicom CEO John Wren told investors on the company's Q3 earnings call this morning.

The companies have secured regulatory approval in two of the 16 jurisdictions where they require it -- South Korea and South Africa --  just the first steps in a large and complex transaction requiring, among other things, economic studies in 47 markets.

POG 'Platforms'

In his update on the merger, Wren hammered hard on the data opportunity.

"We are now able to segment target audiences more meaningfully and reach them ever more precisely… to realize the true value of [data] for our clients. Publicis Omnicom will capitalize on our own technology platforms and work effectively with an increasingly large number of technology platforms," Wren said.

He hailed Annalect, Omnicom's data and insights hub consisting of several hundred data scientists, programmers and others who work across the holding company – including at Critical Mass, RAPP, DDB, PHD, OMG, Organic and others.

Wren also applauded RAPP's recent hire of a director of applied data and heralded more senior talent additions around the data opportunity.

The notion that two holding companies could realize additional efficiencies of scale in audience segmentation has drawn some skepticism. Wren emphasizedthat ability, saying POG will be able to leverage Annalect and its trading desk, Accuen, across a wider base of clients and agencies.

But an agency CEO should herald the data revolution in strictly moderate doses. After delivering his platform reverie, Wren deflated the data balloon somewhat in deference to his firm's creative underpinnings.

"Creativity will not be replaced by algorithms any time soon," he said. "We are in the talent business, and people want to work for an agency that stands for something."

He said that means maintaining strong agency brands capable of bringing big ideas to the table, along with production chops and media channel execution.

Q3 Overview

Omnicom's global revenue grew 2.5% in Q3, to $3.5 billion. Broader macroeconomic conditions were mostly unchanged: Asia and Latin America continue to perform well, while the eurozone has not yet returned to growth.

Media spending, as opposed to creative and brand advertising services, led new expenditures in the United States, where the company saw 5% organic revenue growth in Q3. (The United Kingdom was even stronger, with 7.5%.) CRM spending was up 2.3%. Read the earnings release.

 

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