Originally posted by The Drum
By Sam Bradley | August 17, 2023
After a period of relative quiescence, Omnicom Media Group (OMG) has spent the summer adding agency firepower to its networks, establishing footholds in key verticals and new geographic markets.
Global chief executive officer Florian Adamski hopes the deals – including Ptarmigan, Outpromo, Global Shopper and, on the creative side, Grabarz & Partner – will help OMG keep pace with client needs.
From Adamski’s perspective, advertisers are “battling with complexity,” attempting to balance the need to stay ahead with the need to make very efficient investments and, as a result, are being “overwhelmed by options.”
OMG, he tells The Drum, can offer clients a way through that maze by providing them the means of buying in the right expertise and infrastructure rather than building it themselves in-house. To do that, he argues, it must provide a consolidated agency experience that emphasizes capabilities rather than subsidiary brands. “We want to be able to provide a client with a resource, with a specialism, at any given moment in time. They are less focused on whether they should talk to OMD, PHD or Hearts & Science and more about how they can get that capability.”
Adamski’s first year in the job, he says, had been spent developing ‘Agency as a Platform,’ a proposition that allows clients to pull in services from teams across the OMG network and a means of realizing the goal of a “fluid, integrated, seamless” offer. It’s since become OMG’s go-to-market proposition for every new client.
His second has been devoted to filling “gaps” in that platform – a task that has brought the company its own ‘build or buy’ dilemma. Adamski says the company is interested in tacking on mass – organically or not – for DTC, commerce, customer experience, performance and influencer expertise.
“We think long and hard about whether to build or buy. We like building simply because, if you have a large organization, building might take a moment longer, but the capability is truly yours – yours to embed into teams, to offer to clients, to become an organic part of your offering as opposed to being bolted on.”
But Omnicom’s cultural preference for ‘building’ isn’t always applicable. The acquisition of Ptarmigan was a clear case of ‘buy’ proving superior to ‘build,’ he says. “Ptarmigan is market-leading in the B2B financial services space. That is something you can’t just build overnight.”
Alongside the pharmaceutical, retail and automotive sectors, financial services is a key growth market for OMG. A recent McKinsey report suggested that the total assets managed by the global banking sector could increase from $370tn at present to $550tn during the next 10 years, while traditional banking and finance providers will need to reimagine key portions of their businesses to keep pace with consumer demand and competition. That makes it a fertile area for media, commerce and CX agencies.
But given the barriers to entry in that sector (particularly the expertise around risk and regulation required to assure clients) and Ptarmigan’s international spread, acquisition offered clear benefits.
“When we looked at our client portfolio, there were so many needs and requirements in that space that I did not feel we could build this ourselves in a credible way over the next two to three years,” he adds.
OMG’s approach to e-commerce takes a hybrid view. Last year, the company unveiled an e-commerce consultancy dubbed Transact. In July, it increased the consultancy practice’s firepower by acquiring two Brazilian commerce and retail media agencies, Outpromo and Global Shopper.
“These two agencies fit into that mold quite perfectly,” says Adamski, and gave OMG a decent wedge into the Brazilian market – previously an untapped market for the global network. “We believe these are foundational elements that not only get us on the map but off the ground immediately with two highly successful, scaled agencies in the marketplace.”
It’s no surprise that retail media – in Brazil and in OMG’s core markets – is near the top of Adamski’s agenda. He suggests that the channel will only become more crucial as non-endemic retail brands look for ways to accurately target consumer audiences following the demise of the cookie and changes in media consumption habits.
“What’s happening is a major shift away from retail media being looked at as an additional vehicle to support shopper marketing for CPG clients. It is now shifting to be part of every single media plan because clients have come to the realization that – if they still want to reach certain audiences that are mobile, that are young, that are affluent, that have spending power – they’re running out of options.
“A lot of their former ability to reach people through broadcast media has simply vanished. Cord-cutting is at an all-time high and what is left will further dwindle over time. So, what scenarios can you tap into to still reach these people that have a completely drastically changed media consumption?”
