Omnicom: The World's Largest Advertising Conglomerate

They added that the company's client-centric approach helped it identify changing trends well in time and enter new businesses early to leverage the opportunities. Commenting on the strategy of entering new areas based on client requirements, CEO John D. Wren (Wren) said, "We looked at the way our blue-chip clients were spending their money, and that led us to make investments in other areas. Take pharmaceuticals. We saw that the world is aging, and there would be more need for services there. In direct response, we saw the benefit of one-to-one communications. The recession in 1991 taught us that, as people stop spending money on brand advertising, they spend more in sales promotion. Most of the major advertising agencies at the time did not hold those disciplines in high esteem...

Meanwhile, advertising expenditure spending outside the US was expected to grow by 2% in 2003 and by 5% in 2004. Given its strong credentials and successful track record, Omnicom was in a very strong position in the industry with respect to its ability to take advantage of the opportunities provided by these trends. According to analysts, the company's business mix, efficient top management and strong financial muscle were expected to work to its advantage in the times to come. However, some industry watchers felt that since the advertising agency business was highly dynamic in nature, no single company could remain the market leader for long (See Exhibit VII for a brief note on the global advertising industry)...