Client demand for precision marketing helped Omnicom exceed analysts’ expectations for its Q4 earnings.
Global organic revenue grew 9.5% over the three months ending Dec. 31 as the company continues to rebound from the negative effects of the COVID-19 pandemic. It attributed its growth to improvements in its precision marketing discipline, as well as the ongoing rebound in its experiential discipline as more in-person events resumed in Q4.
Over the full 2021 fiscal year, the company was able to make organic gains across all its disciplines. The company had a 7.4% increase in advertising in Q4 and 10.7% for the full year, now accounting for 55% of all of its revenue.
In Q4, Omnicom reported a 19.6% increase in precision marketing (which covers digital and direct marketing, digital transformation consulting, AI and data and analytics) and 19% for the full year, and now accounts for 8% of total revenue.
The company’s experiential discipline increased by 56.7% in Q4 as more in-person events resumed across the globe (27% for the full year). Additionally, commerce and brand consulting grew 12.4% in Q4 (9.9% for the full year), public relations grew 4.4% (6.3% for the full year) and healthcare revenue increased 4.5% (4% for the full year).
“With the pace of change in the digital space accelerating, we’ve continued to evolve our existing capabilities and invest in new and innovative offerings to meet the needs of our clients and future prospects,” said John Wren, chairman and CEO of Omnicom, on a call with investors after the markets closed on Tuesday. Wren pointed to Omnicom Precision Marketing Group, which offers martech and digital transformation consulting, decision sciences, customer experience design and targeted customer marketing programs as an area where its investments are making a “demonstratable impact.”
The U.S. continues to represent Omnicom’s largest market by revenue, with organic growth increasing 7.8% in Q4 and 8.1% for the year. In the rest of North America, which includes Canada, Q4 organic growth increased 1.8%, versus 11.7% for the full year.
The company also saw increases across all client industries, with the highest increase in pharmaceuticals and healthcare, which grew 15%. Food and beverage increased 14% compared to 2020, and technology increased by 11%. Meanwhile, travel and entertainment, which has been hardest hit throughout the pandemic, saw a 7% increase from 2020, which saw a 30.6% decrease compared to 2019.
Despite the positive signs heading into the new year, Wren said the company anticipates the first quarter of 2022 to be slower due to the spread of the Omicron variant. Wren said the company expects the market to rebound by the second half of 2022.
