Programmatic activities contributed $20 million in incremental revenue to Omnicom Group’s top line in Q4 2014, suggesting the machine-driven media buying trend continues to drive growth in agency land.
For full-year 2014, the holding company’s programmatic revenues were around $140 million, CFO Philip Angelastro told investors during the company’s earnings call. That’s about 1% of total revenues ($15.3 billion).
But on the company’s earnings call with investors, CEO John Wren seemed to tamp down enthusiasm over the potential business uplift from the programmatic trend. “I’m expecting good growth from it but not the type of growth we had as we were starting it up,” he said.
The programmatic disclosure came amid an overall upbeat quarter for Omnicom, as the company reported a Q4 revenue increase of 3.4% to $4.2 billion. The results beat analyst expectations, but Omnicom’s stock was trading down slightly in early Tuesday trading.
In a followup research note, Pivotal Research analyst Brian Wieser suggested supply-side considerations could Omnicom’s continued fortunes in the media-buying arena.
“A wild card for Omnicom is how much incremental revenue will be generated via media trading revenues associated with principal positions it takes. If growth from this activity moderates, then the impact should be limited,” he said.
Wren also emphasized Omnicom’s partnerships with technology companies such as Saesforce.com and Facebook, with whom it signed a deal last year to leverage the company’s rebuilt Atlas ad management platform.
“We are building digital, data and analytical capabilities by investing in our agencies and partnering with innovative tech companies,” he said. “Our creative talent is working side by side with engineers from Facebook, Google, Instagram, Twitter and others.”
Wren cited Omnicom’s cross-disciplinary work for clients like Lowe’s using new platforms like Tap Thru and HyperMade. “Together, our agencies and tech partners did everything from creative and targeting to media placement and analytics,” he said.
