What is Omnicom CEO John Wren thinking?

John Wren is a name we should better get used to. As the chairman and CEO of Omnicom, he is leading the largest advertising holding company in the world, with revenue of over $25 billion.

Wren’s every move will be watched closely, and Omnicom’s strategic moves could signal the future of the ad business. He has indicated that he has a bigger pile of money to invest in new-age tech solutions. “Yesterday I had $1 to invest; now I have $1.67 to invest,” he told analysts. 

During the call with analysts, Wren said that the team will have to enhance and build on its existing data and tech solutions such as Acxiom (first-party data management), Flywheel (e-commerce capabilities), Omni (campaign optimisation), and Interact (enterprise operating system). As per Wren, a combination of these solutions “will effectively position the organisation to thrive in an AI-driven future.”

“By integrating Acxiom’s identity graph, Flywheel’s transactional data, and Omni’s and Interact’s behavioural data and operating platforms, all driven by AI, the combined company will be able to create the most comprehensive and detailed view of a client’s consumers, at every step in their engagement journey, with brands across all client categories,” said Philippe Krakowsky, COO, Omnicom and CEO Interpublic Group, on the synergy among the products that Omnicom and IPG have to offer. 

Wren also has plans to invest in generative AI solutions to aid clients.

We’re keeping pace with new discoveries that are being made in Generative AI. Every company in our business needs to make investments in order to stay at the cutting edge of that - John Wren 

Taking control

Omnicom buying Interpublic Group heightens competition in the agency business because now the number of holding companies is down from five to four, with Omnicom being the top dog. Wren differs and does not think the regulatory challenges with this acquisition should be very high. 

“The world isn't divided into four companies. You have Google, Facebook, Amazon, and many other people who are participating at one level or another and servicing people's marketing needs. This move allows us to take control of our own future rather than wait for technology to impact it in ways that you can't anticipate today.” However, he added that the company will do whatever it takes to get the necessary regulatory approvals and that there are contingency plans in place. 

Wren is aware of the comparisons that are being made to the data and tech capabilities that Publicis, in particular, has managed to achieve with Epsilon, a data and technology platform, that it acquired in 2019. Wren is confident that the complementary nature of solutions that Omincom and IPG hold will be of value to clients. “We certainly will be able to do that (referring to Epsilon) and more by the combination of IPG's assets with our assets,” he said.   

This move allows us to take control of our own future rather than wait for technology to impact it in ways that you can't anticipate today - John Wren

“When you look at the depth and breadth that both organisations bring, not to healthcare advertising but to the practice of marketing of healthcare, there is no one that can come close to servicing every aspect of what a pharmaceutical or an ethical pharmaceutical company wants to do than the combination of the assets that we have plus the assets that they have, and they very much complement each other,” Wren added. 

Wren here speaks about healthcare in particular because the combined entity of Omnicom earns 19% of its total revenue from the pharmaceutical and healthcare sectors. Food and beverage companies make up 12% of its revenue pie. 

Collapsing agency brands?

After Mark Read took over as the boss at WPP, he gave the slightest nudge to a consolidation wrecking ball. And with this acquisition, similar questions do emerge. Especially because Omnicom only a year ago introduced the Omnicom Advertising Group—an umbrella entity that unifies all creative agencies in Omnicom. So will McCann get rolled in OAG? 

Collapsing brands is not a winning long-term strategy here - Philippe Krakowsky

Wren is here to assuage such worries, “There have been no immediate decisions made whatsoever in terms of how the portfolio assets of both companies are going to function post-regulatory approval. What we will do is, in the intervening period, we'll have conversations about what's best first for clients and our people in terms of the way that we'll approach this.”

Krakowsky chimed in, adding, “collapsing brands is not a winning long-term strategy here. And so the compelling logic for us was strategic.”

Source for all revenue related information: Omnicom investor presentation