Omnicom consolidating 2016

Omnicom (OMC) was formed in 1986 and is one of the largest providers of advertising and marketing communication services to over 5,000 clients in more than 100 countries.

As a full-service agency, Omnicom provides numerous services, including designing ad campaigns, making the actual ads, determining where the ads should be placed and distributed, media buying, account management, public relations, consulting, and more.

However, the company also has a meaningful presence in Europe (27% – about a third is the U.

K.), Asia Pacific (11%), Latin America (3%), and the Middle East and Africa (2%).

The knowledge agencies build up about specific clients creates another unique switching cost – client conflicts.

omnicom consolidating 2016-19

Omnicom holds more than 1,500 advertising agencies that specialize in over 30 marketing disciplines, including branding, content marketing, digital marketing, data analytics, instore design, advertising, social media marketing, search engine optimization, and more.

On this note, Omnicom is estimated to derive over 30% of its revenue today from digital marketing activities.

From a growth perspective, advertising spending is generally driven by corporate profits and consumer spending trends.

The company groups its services in the following fundamental disciplines: Advertising (53% of sales), CRM Consumer Experience (17%), CRM Execution & Support (14%), Public Relations (9%), and Healthcare (6%).

Omnicom’s agencies serve virtually all industries, including: food and beverage (13%), pharma and healthcare (12%), consumer products (10%), auto (10%), technology (9%), financial services (7%), retail (6%), travel and entertainment (6%), telecom (5%), and other (22%). In 2017, its largest client represented 3% of revenue, and its top 100 clients represented 51% of Omnicom’s total sales.

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