Water is wet, the sun sets in the west, and Omnicom still says it expects to close its merger with IPG in the second half of this year.
Omnicom Chairman and CEO John Wren repeated this now-familiar refrain – the bit about Omnicom and IPG, not the platitudes – to investors during the holdco’s Q2 earnings call on Tuesday evening. He said the response to the impending merger among clients and staff has been “overwhelmingly positive.”
There is some news to share, though, since Omnicom reported earnings last quarter.
In late June, the proposed acquisition was officially reviewed and approved by the Federal Trade Commission, meaning that Omnicom and IPG now have approval from 13 out of the 18 jurisdictions necessary to fully close the deal.
But, notably, Wren didn’t have much to say about the more unusual aspects of the FTC’s proposed consent order, which mandates that Omnicom cannot deny ad dollars to a media publisher based on political or ideological viewpoints.
What Wren did say, however, is that US approval had been the biggest “question” (or “hurdle,” as he referred to it before self-correcting), and that those remaining five governments will likely take their cue from the US when making their decisions.
Business as usual
In the meantime, despite the near-constant threat of an uncertain economic market, business still appears to be chugging along favorably for Omnicom.
Omnicom posted just over $4 billion in revenue for the second quarter, a 4.2% increase compared to this time last year. Organic growth for the quarter rose 3%, in line with the company’s guidance of between 2.5% and 4.5% for the full year.
Although some clients were more impacted by tariff concerns than others, until the Trump administration actually finalizes its policy, the macro environment likely won’t change very much, said Wren, who describes conditions as “mostly business as usual.”
What is changing, however, and rapidly – thanks to AI – is how agencies create and optimize campaigns.
Omnicom is very focused on developing its various data and AI products, which were recently consolidated into what Wren referred to as a single “end-to-end platform organization” led by former Flywheel CEO Duncan Painter. (Omnicom bought Flywheel in 2023 for $835 million.)
Today, that new unit includes the Omni Assist platform (which specializes in agentic AI), ArtBotAI (generative AI) and Flywheel (digital commerce). Eventually, once the merger closes, Omnicom plans to add IPG’s Kinesso (performance marketing) and Acxiom (data and identity).
According to CTO Paolo Yuvienco, Omnicom has been “aggressively and systematically rolling out AI agents” throughout the company’s workflow, highlighting their use in synthetic focus groups for pre-launch campaign ideation and testing.
One investor, however, raised an interesting question: If using AI tools continues to streamline Omnicom’s workflow, won’t that cut into the standard agency compensation model, which typically bills clients based on time spent?
To that, Wren and Yuvienco noted that Omnicom’s interest in AI goes beyond efficiency and into its potential for personalized content creation – what Yuvienco called “uncharted creative territories.”
Besides, said Wren, agency remuneration models have changed before during his decades-long career, so it stands to reason that they’ll change again if necessary.
“It’s been my experience that anytime that we can become more efficient,” Wren said, “clients typically will reinvest that money in the brand itself.”
