Programmatic Already 1% of Omnicom Revs, But How Much More Will it Grow?
What: Omnicom’s Q4 2014 results showed a net income of US $329.5 million versus US$300.5 million in the year-ago quarter. Worldwide total revenue increased by 5 per cent to US $15.3 billion. Interestingly, Omnicom disclosed that programmatic revenues were around US$ 140 million or 1% of total revenues.
Why it matters: While programmatic is growing, Omnicom's leadership was somewhat cautious about the future growth prospects of automated media buying and associated technologies and services.
Omnicom Group shared fourth-quarter 2014 results showing a net income of US $329.5 million or US$1.30 per share versus US$300.5 million or Us$1.13 in the year-ago quarter Worldwide total revenue increased by 5 per cent to US $15,317.8m.
Programmatic trading added almost US$20 million in incremental revenue to Omnicom Group's top line in Q4 2014, suggesting that media buying trend continues to drive growth for agencies. Programmatic revenues were around US $140 million for full-year 2014, about 1% of total revenues (US$15.3 billion).
For full-year 2014, the holding company's programmatic revenues were around $140 million, CFO Philip Angelastro told investors during the company's earnings call. That's about 1% of total revenues ($15.3 billion).
But on the company's earnings call with investors, CEO John Wren seemed to tamp down enthusiasm over the potential business uplift from the programmatic trend. "I'm expecting good growth from it but not the type of growth we had as we were starting it up," he said.
Adexchanger notes that in a followup research note, Pivotal Research analyst Brian Wieser cautions that "a wild card for Omnicom is how much incremental revenue will be generated via media trading revenues associated with principal positions it takes. If growth from this activity moderates, then the impact should be limited," he said.
Wren added that "We are building digital, data and analytical capabilities by investing in our agencies and partnering with innovative tech companies." "Our creative talent is working side by side with engineers from Facebook, Google, Instagram, Twitter and others," he said.
Omnicom’s Q4 results include US $13.3 million in pre-tax charges, mostly comprised of professional fees, due to its terminated merger with Publicis Groupe. Organic growth represents change in revenue without taking into account the impact of acquisitions or disposals or currency fluctuations.