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Students Research Agency Holding Companies

January 22nd, 2018 · No Comments

First in a periodic series of major agency holding company summaries researched and written by PRAD graduate students at DePaul University.

Student-designed "placemat" summarizes highlights of second largest holding company, Omnicom.

Student-designed “placemat” summarizes highlights of second largest holding company, Omnicom.

By Samantha Perlman and Ashlyne Wilson

They called it the “Big Bang,” an event so great it warranted a title synonymous with the creation of the universe. The 1986 merger of ad agencies BBDO, Doyle Dane Bernbach and Needham Harper Worldwide marked the formation of a global creative powerhouse of galactic proportion, Omnicom Group Inc.

Aligned on the principles of talent, collaboration and creativity, it was equipped to deliver superior marketing services on a global scale. The newly formed holding company was aptly named to convey the idea that it wouldn’t deliver on advertising alone, but on all (omni-) communications (-com). Omnicom instantly became the world’s largest advertising company, its sheer size unmatchable. The impact was felt across the industry as it thrust forward at light speed on a course of consolidation.

Omnicom remains one of the largest communications organizations over three decades later with a reported $15.42 billion in revenue, surpassed only by WPP. The company flourished under the leadership of visionaries Bruce Crawford, longstanding Chairman of the Board and John Wren, President & Chief Executive Officer since 1997, among others. Based in New York, its holdings include 1,500 distinct agencies with 74,000 specialists – and counting – across the globe. Omnicom has set the gold standard for quality advertising as the most creatively awarded network in the industry, serving over 5,000 clients in a variety of marketing disciplines, including brand advertising, CRM, media planning & buying, and public relations.

Omnicom Group is comprised of three global advertising agencies: DDB, BBDO and TBWA, a full-service media network under the Omnicom Media Group umbrella with notable agencies OMD and PHD, and the Diversified Agency Services (DAS) division which manages over 200 agencies counting heavy hitters RAPP, FleishmanHillard and Ketchum among its top grossing firms. Boasting an impressive portfolio of marketing leaders, Omnicom has won the business of many high-profile clients, including Adidas, Disney, Mercedes-Benz, Apple, AT&T, Proctor & Gamble, and many more.

In 2016 Omnicom won an account that would turn the industry upside-down, reminding us of its extraordinary inception 30 years prior. After a four-month pitching war, DDB nabbed McDonald’s billion-dollar creative and media agency business from longtime AOR Leo Burnett. The even more groundbreaking feat: creating We Are Unlimited, a fully-integrated agency based in Chicago that is dedicated solely to the McDonald’s brand. “We received a dream brief from one of the most iconic brands in the world to create ‘the agency of the future,'” DDB North America President-CEO Wendy Clark said in a statement. “The best and the brightest talent across multiple Omnicom agencies came together… [and] the result is a customized agency built with intelligence at the core, to fuel brilliant creative work.”

Emily Bader, EVP Strategic Planning at We Are Unlimited, notes the advantage of the collective intelligence that working under a holding company offers. She explains “our closeness to the consumer is designed for effectiveness and agility. When we understand human beings more deeply, we are unlimited in our ability to create ideas that transform culture, business, and lives.” We Are Unlimited cultivates and applies knowledge from talent across Omnicom, with an unrivaled depth of skills from cultural strategy & CRM to data & marketing, and nearly everything in between. This new agency model is a reflection of Omnicom’s ability to innovate and stay ahead of the curve amidst the changing dynamics of the advertising industry.

With all its success, Omnicom is positioned to top financial analysts’ estimates for 2017. Omnicom Group’s North American revenue rose 2.1% in the third-quarter, which was better than analysts’ predictions of 1.1%, however aggressive competition from consulting firms such as Accenture and IBM is an ominous threat that must not be left unchecked.

Twenty years ago, AdWeek reported that “the vision of a marketing world with global accounts and giant holding companies for corresponding agency networks is now the nature of advertising.” The birth of Omnicom shook the very core of advertising and PR, and nothing has been the same since. As the uncertain future of advertising looms before us, it is exciting to wonder how Omnicom, arguably the brightest star in this universe, will continue to adapt and revolutionize the industry.

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