Publicis chief calls out Omnicom over revenue reporting

At a Morgan Stanley conference in Barcelona, Publicis Groupe chairman and CEO Arthur Sadoun took aim at Omnicom’s accounting practices. “Right now, Omnicom is the only one reporting organic growth in gross revenue, which makes it impossible to truly compare its performance with the rest of the market,” he said, as reported by AdAge.

He urged that “apples and oranges accounting has to end” once Omnicom becomes the industry’s largest player.

Most global agency groups including WPP, Publicis, Interpublic Group of Cos., Dentsu Group and Havas disclose net revenue, while Omnicom and Accenture Song report gross revenue. The distinction matters: gross revenue reflects total income, whereas net revenue is what remains after deductions.

Sadoun’s remarks come as Omnicom completes its acquisition of IPG, creating the world’s biggest agency holding company by revenue. With that scale, he argued, comes a new obligation for clarity. “What wasn’t a problem when they were distant third will become one now,” he said, referring to the legacy agency networks.

“Investors and shareholders need transparent, comparable performance metrics across the industry. The new Omnicom has a duty to the financial market to measure its performance on the same basis as its competitors.”