CEO Ruhanen pledges growth not cuts as new Omnicom Advertising Group brings agencies together

According to Troy Ruhanen, the newly formed group’s CEO, the key driver in this development is the need to find easier ways to scale the company’s investments in innovative tools, technologies, specialist capabilities and AI platforms across the global network as it strives to deliver the best creative solutions for clients in a future expected to be powered by AI. Ruhanen, who was hitherto president and chief exec of TBWA\Worldwide, will lead the new operation alongside trusted TBWA colleagues Deepthi Prakash and Denis Streiff as chief operating officer and global chief financial officer, respectively.

Speaking about why Omnicom has taken this decision at this time, Ruhanen told The Drum: “Our clients need more from us. The growth of marketing channels, consumer expectations, data, technology and AI mean that we need the best creative talent in the world, along with more capabilities, more technologies, and more tools than ever before to be competitive. We can’t invest in all of this individually to the degree we can together. While our agencies are the hubs of talent, OAG will provide the foundation of technology, capabilities and innovation that will enhance how we grow and sell creative ideas and solutions.”

Asked if this could lead to job cuts or consolidation across the group, Rahanen said: “OAG will ensure that its agencies’ creative cultures continue to thrive. Clients will still be serviced by the same teams they are working with, but now with access to even better tools and capabilities. The talent within our agency brands will have access to more job mobility and more opportunities to experiment and innovate.

“The formation of OAG is being driven by opportunities for growth, which we expect will lead to more opportunities for our talent over time. We will be finalizing the OAG leadership and operating model in the coming months. As always, our businesses will be evaluated by their performance, the needs of our clients, and our go-to-market strategy. There are no redundancies currently planned.”

All agencies coming under the direction of OAG will retain their own brands, own cultures and key people. Nancy Reyes will lead BBDO as global CEO, Alex Lubar will lead DDB as global CEO and Erin Riley will be elevated from her role as CEO of TBWA\Chiat\Day to CEO of TBWA\Worldwide.

“Omnicom has a proven track record of successfully managing agency brands through operating groups in many Practice Areas,” said Ruhanen. “This has been done in media, precision marketing, public relations and more for over 10 years. That same model is now being expanded to the advertising agencies.”

In July, Omnicom released ‘better than expected’ financial results, achieving a 5.2% increase in organic revenue, adding $188.3m compared with the same period last year. That lifted revenue to $243.9m, or 6.8%, bringing the quarterly total to nearly $3.9bn, slightly above analysts’ estimates of $3.82bn, according to data from the London Stock Exchange Group (LSEG), a leading financial markets research firm. Earnings per share for the quarter were $1.95, exceeding the consensus estimate of $1.93 and reflecting a 7.7% year-over-year increase.

Commenting on how staff have reacted to the news, Ruhanen said: “Our agencies are packed full of the most incredible talent, and I am so grateful to them for the warmth, enthusiasm and energy they are already showing towards me. It is still early days, but we are openly communicating with all our employees and making it clear that, alongside their agency leadership, we are here to answer any questions they may have. We are incredibly lucky to have this OAG team, our agencies and their leaders, and Omnicom’s other expert practice leads to support us as we build OAG into a huge success.”

Existing clients will continue to be serviced by the agency and teams they currently work with, now with the enhanced capabilities of the wider group.