Omnicom Calls IPG Integration 'Substantially Completed,' Wins Coke's NA Media

By Amara Osei

Omnicom has declared its integration of Interpublic Group "substantially completed" nearly a year after the acquisition — the largest ever in the agency space — was set in motion. CEO John Wren made the claim on an earnings call Thursday, and the combined company remains on track to realize its planned $900 million in cost savings this year.

That process has had a human cost. Omnicom has cut jobs and sold assets it describes as noncore.

"Major progress has been made in divesting the businesses we identified as not core to our future," Wren told investors. "We expect to complete the remaining handful of dispositions in the near term."

What did Q3 deliver?

Revenue grew 7.2% year over year on an organic basis (stripping out assets held for sale) to reach $6 billion in the third quarter. Integrated media led the quarter with growth above 10%, momentum Omnicom says translated into new client wins, including Novo Nordisk's U.S. media buying.

The group also highlighted its management of $9.9 billion in sports sponsorships, an area it says paid off around the World Cup and should bolster results through the 2028 Olympic Games.

The full picture is less uniform: for the first nine months of the year, organic growth stood at 5.8%.

What does the Coke win mean after losing PepsiCo?

The Coca-Cola Company on Thursday announced it was handing Omnicom its media duties in North America. The win lands shortly after Omnicom lost PepsiCo's global media business — an account it held for decades — to Publicis Groupe, which won it without a traditional pitch. Publicis had been handling Coke's media and data business in North America since last year, making the reallocation a direct swap between the two rivals.

Wren declined to elaborate. Asked by investors about the news, he deferred comments to Coke. He said pitch activity is healthy overall and that most accounts expected to go into review have already done so within the first nine months of the year.

The $900 million savings target and the Coke win are the headline items; what remains unpriced is any revenue attrition from integration disruption, which the company did not address.

Who left, and does it matter?

Omnicom's creative division has seen high-profile departures. Tyler Turnbull, a key figure at FCB and then McCann, left earlier this month to lead WPP's creative arm. Before that, Troy Ruhanen, a company veteran who most recently served as president and CEO of Omnicom Advertising, retired. Revenue for Omnicom's advertising segment declined in the mid-single digits in Q3.

"There's no one key individual in this company that the company revolves solely around," Wren said in response to an analyst question. "Everybody is replaceable and we anticipate and have succession plans for all of our key positions throughout the company, so when something like that happens, we're able to react to it very smoothly. And that's what's occurred in the advertising group."

Succession plans may cushion the departures, but they do not explain the segment's mid-single-digit revenue decline, which Wren did not directly tie to the exits.

The takeaway: integration is nearly done, media is carrying the numbers, and creative is the open question.