Omnicom Group has released its first earnings report since completing its $13 billion-plus acquisition of rival Interpublic Group (IPG) in November, posting a sharp rise in fourth-quarter revenue but opting not to disclose organic growth figures — a key metric closely tracked by industry analysts.
For the quarter ended December 31, total revenue reached $5.5 billion, representing a 27.9% increase compared to the same period a year earlier. The growth was partly driven by the inclusion of one month of IPG’s operations in the consolidated results.
Media and advertising remained the dominant contributor, accounting for approximately 60% of Q4 revenue. Precision marketing made up 10.3%, while public relations contributed 9.1%.
Organic Growth Withheld From Reporting
Despite heightened interest in the performance of what is now the world’s largest marketing services organization, Omnicom said it does not plan to report organic revenue growth in its quarterly presentations this year.
Chief Financial Officer Phil Angelastro told analysts during the earnings call that, based on historical measurement standards and excluding planned dispositions and assets held for sale, Q4 organic growth would have been approximately 4%.
The decision to withhold regular organic growth disclosures could complicate efforts by investors and analysts to assess the underlying health of the combined entity as integration progresses.
Cost-Savings Target Doubled to $1.5 Billion
Alongside its earnings update, Omnicom announced a significant increase in projected cost savings from the merger. The company doubled its expected savings from $750 million to $1.5 billion, with $900 million targeted for realization in 2026 alone.
CEO John Wren outlined three primary sources of savings:
- Labor cost reductions: $1 billion
- Real estate consolidation: $240 million
- General and administrative, IT, procurement and operational synergies: $260 million
Labor savings will represent the largest share, surpassing the company’s original total cost-savings goal on their own. The plan includes eliminating duplicative roles, streamlining agency structures and accelerating outsourcing and offshoring initiatives.
Wren added that the company is expanding the use of automation and artificial intelligence across its operations to enhance service delivery and operational efficiency.
“Across every area of our business, we are evaluating and deploying automation and AI to improve how we service our clients and run our operations,” he said.
Portfolio Pruning and Employee Impact
As part of its integration strategy, Omnicom also plans to exit or divest businesses in smaller, nonstrategic markets that collectively generate roughly $700 million in annual revenue.
The intensified cost-cutting and restructuring efforts come after a period of disruption for employees navigating the merger of two major agency networks. The expanded savings target may raise concerns internally, particularly following earlier layoffs and recent adjustments to employee benefits.
When questioned about client sentiment regarding the acquisition, Wren said feedback has been largely positive. He noted that business partners have expressed enthusiasm about the combined company’s positioning and insisted that optimism extends throughout the organization.
“Across the board, it’s far better than I fully expected,” Wren said, acknowledging that he had anticipated some resistance but had not observed any significant negativity within the group.
As Omnicom moves deeper into the integration process, investor focus is likely to center on how effectively the company balances aggressive cost reductions with maintaining creative output, client relationships and workforce morale.