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October 30, 2023 | By Megan Graham

Flywheel, part of Cannes Lions owner Ascential, aims to help brands sell on digital marketplaces such as Amazon.

Advertising holding company Omnicom said it has agreed to acquire Flywheel Digital for a net cash purchase price of approximately $835 million, in what it says is its biggest acquisition ever. Flywheel is the digital commerce arm of Ascential, a U.K.-based business-to-business media, events and analytics company that owns the Cannes Lions advertising festival. Flywheel offers services designed to help brands sell on digital marketplaces operated by companies including, Walmart and Alibaba.

Omnicom, which owns agencies such as BBDO, OMD and TBWA, is betting that the addition of Flywheel will make the agency giant’s digital commerce and retail media offerings more attractive for clients.

E-commerce and retail media, in which businesses such as grocery and big-box chains offer advertisers ways to reach consumers using customer data, have undergone explosive growth in recent years.

“Flywheel brings a scaled capability to Omnicom in the fastest-growing part of the industry, which is retail e-commerce and then retail media,” Omnicom Chief Executive John Wren said. “That’s a capability we have in part, but these are the leaders.”

Wren said the company’s first instinct is typically to build a capability instead of buying it, but that Flywheel had accumulated a significant head start.

“When I sent my three top technology guys down to take a look at [Flywheel], they basically said, ‘You can’t replicate what they’ve done. It will take you as much money and at least five years,’ and that’s if the world sits still, which the world’s not about to do,” he said.

Marketers are looking at digital commerce and retail media when asking agencies to compete for their business, Wren added.

“There’s at least a cursory examination of what our capabilities are,” he said. “We’ve been very successful here especially in winning our fair share, but this will make us stand apart.”

E-commerce has become a growing priority for Omnicom and its competitors as it has increased in importance for brands, spurring deals such as Publicis Groupe’s purchase last year of e-commerce software company Profitero to provide analytics for marketers.

Flywheel offers information and tools to brands for various aspects of retail media and e-commerce, including managing products for sale across different online marketplaces, providing information about competitive pricing, selecting the right product descriptions and imagery, and understanding how well products are performing.

The company is expected to help Omnicom clients tailor their online offers for consumers, said Florian Adamski, chief executive at Omnicom Media Group, which houses Omnicom’s media agencies and data capabilities.

“As the customer arrives at a specific product page on a marketplace such as Amazon, Flywheel has a core strength in optimizing the so-called listing, the product page itself,” Adamski said.

That could mean tailoring the page to display a certain color and variant of a product based on what a given shopper might want.

The company is also expected to help Omnicom clients react to trends around the world, Adamski said, potentially suggesting shifts in prices in response to regional surges or increasing promotions in certain areas during specific times or days.

Flywheel will operate as a “practice area” within Omnicom, alongside disciplines including healthcare and precision marketing. Omnicom said the practice area would be led by Duncan Painter, who is currently Ascential’s CEO.

Ascential said Philip Thomas, currently chief executive of its intelligence and events division, would succeed Painter as CEO of the company.

Flywheel’s more than 2,000 global employees will join Omnicom as part of the deal, which is expected to close in the first quarter of 2024.