Omnicom’s organic ad revenue slides as IPG overhaul bites

Omnicom’s organic advertising revenue declined at a high-single-digit rate during the June quarter as the company reorganised its creative agency portfolio following the acquisition of Interpublic Group.

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The advertising division was Omnicom’s only core discipline to record an organic revenue decline. However, executives attributed the fall to internal reorganisation rather than a broader reduction in client demand.

Agency portfolio reshaped

Phil Angelastro, Omnicom executive vice-president and chief financial officer, said the group had been working to create a more connected and centrally managed Omnicom Advertising Group.

The process began during 2025 and, in some areas, late 2024. Omnicom has since worked to bring IPG’s assets together with its existing advertising businesses.

The integration has involved realigning agency brands and eliminating some brands. Omnicom has also sold agencies in several smaller, low-growth markets where it no longer required multiple businesses serving similar clients.

“There’s been a lot of activity in bringing these businesses together, and certainly we’ve made significant progress,” Angelastro told analysts during the company’s earnings call.

He said internal reorganisation had driven much of the change within the advertising business during the first half of 2026.

Creative remains central

Advertising generated less than 16 per cent of Omnicom’s core operations revenue during the quarter. Integrated media accounted for about 53 per cent and delivered organic growth of more than 10 per cent.

Public relations grew at a mid-single-digit rate, while health was flat. Experiential and other services grew by more than 10 per cent, supported by activity linked to the FIFA World Cup.

John Wren, Omnicom chairman and chief executive officer, said creative capabilities remained central to the company despite the disruption caused by the integration.

“Creative is our IP, and we’re completely dedicated to it, even as it goes through some of these difficulties, because we’ll work through them,” Wren said.

Angelastro said the advertising group would remain a driver of innovation and integrated client solutions. It will also play a central role in Omnicom’s global pitches.

Omnicom lifts revenue outlook

Omnicom’s core operations generated revenue of about $US6 billion during the quarter ended 30 June 2026. Organic revenue increased 6.1 per cent, while reported group revenue reached $US6.6 billion.

The result prompted Omnicom to lift its full-year organic revenue growth forecast to 5 per cent. Its previous guidance was between 4 per cent and 4.5 per cent.

Omnicom is targeting $US900 million in cost savings during 2026 as it combines the two businesses. The company expects total savings from the acquisition to reach $US1.5 billion by mid-2028.

Angelastro said Omnicom had delivered slightly more than half of its 2026 savings target by the time of the earnings call.