A Brief History of Omnicom

This is the second in the series about the major agency holding companies. For a history of WPP, see: https://www.liftletters.com/all-letters/2017/9/12/a-brief-history-of-wpp

Omnicom is the 2nd largest agency holding company by most measures. It is also the newest, as a holding company, dating back only to 1986. The company was created as part of a 3-way merger between BBDO, Needham Harper, and Doyle Dane Bernbach (DDB). During the merger, Needham and DDB became DDB Needham, and by 1996, the Needham name was dropped.

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DDB dates to 1949 and was a very successful creative agency, including creating the Avis "We Try Harder Because We're Number 2" campaign, the infamous Daisy ad for Lyndon Johnson (https://www.youtube.com/watch?v=dDTBnsqxZ3k), and VW's numerous famous campaigns over the years. Needham was founded in 1925 and eventually became very successful in TV advertising. It is famous for, among others, numerous McDonalds campaigns (e.g. https://www.youtube.com/watch?v=JeC27B60-Mk). BBDO is a creative agency that traces back to 1891, and was the product of mergers itself. BBDO was the primary competitor to the fictional Sterling Cooper in Mad Men. BBDO is one of the most legendary creative shops, to the extent that January 10 in NYC is BBDO Day. BBDO is responsible for many of the Pepsi, Burger King, Campbell's and more campaigns over the years. 

The 3 agencies originally merged in large part because of the spate of ongoing public-company acquisitions that were buying up other agency holding companies. However, financial discipline and opportunity was another driver. The year of the merger, the company had a 4.1% margin in what was normally a double-digit margin business. Omnicom has significantly grown its top-line and its margin since the acquisition (it is now at 12%). John Wren has been the CEO since 1997 - roughly two thirds of its existence. 

The company has been significantly less acquisitive than WPP, though still has made major purchases. One major acquisition was TBWA, purchased in 1993 for $100M, (merged with Chiat Day, which Omnicom purchased in 1995 for around $60M),   

The history of Omnicom focuses meaningfully on its creative side, but it is now a substantial force as a media agency as well. The Omnicom Media Group is the media services division of Omnicom. It consists of OMD Worldwide, PHD Network, Annalect, Accuen, and a few others. 

OMD Worldwide was originally Optimum Media Direction (OMD), which launched in France in 1996 as part of the unification of BBDO, DDB and TBWA's media operations. It has since expanded to be a global agency and goes simply by OMD. PHD is originally a British firm, purchased by BBDO for £5 million is 1996 and merged with its own media arm. The US arm was launched in 2002, and was rolled out globally in 2005. 

In 2016, Omnicom founded Hearts & Science as a data-driven media agency as part of its successful pitch to win P&G from Starcom (Publicis). AT&T subsequently moved to Hearts & Science as well.  This pitch focused heavily on Annalect, which was founded as part of Omnicom in 2010. The notion is that Annalect is filled with data scientists and similar consultants that work closely with Omnicom's media agencies - as well as increasingly the creative agencies. Accuen is the primary agency trading desk within Omnicom, and is part of Annalect.