Digital Gabe
Cutting Edge Commentary On All Things Media

Revenue Up At A Skinnier Omnicom

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I guess it might be true that less is more in the agency world.  Despite selling off 19 different companies and shedding 7,000 employees worldwide, Ominicom’s top line revenue was up 3% in Q3, which boosted net profits by almost 14%.  Most of Ominicom’s Q3 divestures were part of their CRM execution and support group, which offers services such as research, field marketing, point-of-sale, sales support and merchandising.  5,600 of their staff reduction came from this selloff, while another 1,400 employees were shed from their continuing core operations.

Wall Street cheered these results with a 7% bump in share price during afterhours trading.  On a macro level Omnicom’s skinny pivot may become a road map for other bloated HoCos who have seen their profits decline due to flattening ad revenue against a heavily layered org structure.  By reducing/consolidating the number of operating units it runs, Omnicom was able to eek out solid bottom line gains with only a modest revenue increase.  I’m sure the other HoCos are taking notes from this playbook.

 

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