Media Buying Briefing: Omnicom Media Group’s CEO on the economy, fraud, the quadropoly and ‘agency as a platform’
This Media Buying Briefing covers the latest in agency news and media buying for Digiday+ members and is distributed over email every Monday at 10 a.m. ET. More from the series →
Just over a year ago, I conducted interview with Omnicom Media Group global CEO Florian “Flo” Adamski in which he expressed more optimism about the global economy than many others were predicting for 2023. Turns out he was pretty right — as most agree the expected recession in the first half of the year never really materialized.
Fifteen months later, Adamski sat down with me again to revisit the economic outlook for 2024 — what’s widely expected to be a most unusual year thanks to politics and major events, as well as global instability.
He discussed OMG’s growth strategy to become an “agency as a platform.” Adamski also shared some thoughts about the “quadropoly” of Meta, Google, Apple and Amazon — four partners the media agency network deals with but also spends millions in clients’ dollars on. Finally, he also addressed the recent ANA followup report on the programmatic world of investment, explaining why he thinks the industry is taking the issue of fraud and waste seriously.
The following conversation has been edited for clarity and space.
Here we are at the end of 2023. There is some economic uncertainty, but most of the prognostications I’ve seen predict a decent landing for the rest of this year and at least some level of growth for 2024. What do you see coming at the end of this year and for ’24?
We have been seeing inflation coming down. I think it was a little more resilient than we all hoped for. The reason it was resilient is because I think especially in the ‘States, but also in some of the other regions, the consumer has been very, very resilient. That was really a factor that many of the economists did not expect — that the consumer would stay as powerful and confident in the way they they went about their lives and continued to invest their money into products, and especially experiences, that they felt strongly about.
The past quarter has shown that inflation definitely now has been correcting and has been going more into the swim lane that we were hoping for. It is probably fair to make the assumption, along with many experts that know much better, that the Fed might be done [with raising interest rates] at least for the short term, and potentially start trending down again in 2024.
Agility and flexibility is very, very ingrained in who you are as an agency, [as is] the technology built for that, to be responsive to these things. It’s something that you need to have. So yeah, I would say ’23 might not be entering the Guinness Book of Records in terms of all-time growth, but it turned out to be more robust and solid than many people probably feared at the time.
So given those factors, does that give you a little bit and your clients a little bit more clarity into what 2024 is going to be like? Or is it murky like it was last year for different reasons?
I think we just need to get used to [the fact] — and we have been really for a number of years now — that things are no longer straightforward and that 12-month predictions are a thing of the past. I think that ’24 for our clients is not going to be so dramatically impacted by global events, but really by events that happen closer to our industry. There are a couple of numbers that might help [to explain] that. Let me start with a one — $1 trillion. According to some analysts, 2024 is going to be the year when for the first time ever, the global ad economy will be spending more than a trillion dollars.
I’ll give you another one. 1% of cookie deprecation happening in Q1 next year. Apparently there is a clear plan, so it’s important that clients get ready for it. I’ve seen a recent stat that at least 50% of clients do not feel prepared. You need your agencies, you need your specialists, you need your in-house teams to really, really embrace it, because I do believe that we will see this happening next year.
The third number I’ll give you is 50. 2023 marked the first year in history where overall viewing consumption of the U.S. consumer was less than 50% for linear TV as opposed to connected TV. And that is a trend probably that we will see continuing in 2024 as well.
You’ve just described a lot of complex and uncertain factors that can really impact your clients’ business and, by extension, your business in terms of the agility you need to bring to bear. What’s your strategy to offer that agility?
The first order of strategy is hard work and resilience, right? “Agency as a platform” is a core concept of how we go to market. Internally what it really means is that the 24,000 people that work on behalf of Omnicom Media Group globally come together as one in a more seamless and more integrated way. We have dozens and dozens of specialties that we have within within Omnicom media Group — this is not in any shape or form exclusive to OMG, It’s true for other agencies as well. The question is, how do you make the best of the specialties that you have but deploy them in a way that is that is highly integrated?
These things are sometimes easier said than achieved — and we are a large organization. But I do believe we have always kept our sense of nimbleness and kept our sense of being born out of creative agencies. So finding new ways to cope with new challenges is actually part of what gets me out of bed in the morning.
I think I made up a word: quadropoly. I see Google and Meta as a bit on their heels, having been the dominant forces of the last decade, while Apple and Amazon are a bit more ascendant with seemingly clearer roads ahead. What are your thoughts on the power balance among those four companies, but also how your agencies deal with them on behalf of your clients?
You might want to put a copyright on quadropoly. I have all the interest in the world in a very, very healthy media ecosystem — and we partner with the platforms that you’ve mentioned. We partner with everybody else that is A, willing to partner in a constructive way and B, puts the right guardrails into place that allows for our clients to safely multiply their messages.
It would be short-sighted to start dissecting what each individual’s fate might be, because all of them are not only mighty and powerful and have deep commercial pockets. But all of them have shown over and over again the ability to reinvent themselves, to innovate at speed and scale, and to respond to changing times. I think they will invest heavily in the future of AI. We need them at around the table to discuss some of both the opportunities but also risks as it relates to the future of AI.
After yet another report calling out the programmatic business, marketers seem to be willing to accept that this is part of the business. Do you get that sense?
I disagree with the notion that people seem to be accepting of that fact. I did mention the trillion dollars of ad spend to be expected in 2024. The fact that bad actors exist in a space that spends that much money is not surprising at all. The fact that not every single dollar of $1 trillion is being spent effectively and efficiently is also unsurprising. That is why I believe media agencies such as Omnicom Media Group do exist, to help clients to make sense of that complexity.
Coming back to the ANA report, it was a confirmation of what we’ve been telling clients and the work we’ve been doing not only for months, but actually for many years. It sheds a light on just how diligent you need to be in how you run your media dollars.
For example, MFA is something that we talked about a lot. It’s like the terminology of the year in our neck of the woods.
It’s the dirty acronym of the year.
Yeah. And, and we’ve been investing a lot of time and resources, partnering with vendors, partnering with technology companies in really screening websites for MFA-suspicious activity. And once that’s been confirmed, they’re being weeded out. Also, inclusion lists, easy to say, much harder to be done.
There’s a knowledge asymmetry between clients and these bad actors and behaviors. And I think that asymmetry needs to be addressed. I think agencies can play a big role in here, but also clients need to skill up.
Color by numbers
DoubleVerify published a study last week on retail media network demands, surveying more than 400 ad executives from the U.S., U.K., France and Germany. Some key findings, per Antoinette Siu:
- The U.S. is leading all markets on adoption and spending: 87% of these respondents are using RMNs; 83% plan to increase their RMN spend.
- Amazon is winning as the most adopted RMN in three of the four markets studied: 51% in the U.S., 71% in the U.K., and 51% in Germany.
- Acquiring first-time customers through RMNs was the top primary goal for those surveyed (45%), followed by 40% who said it was for “targeting specific demographics and product interests.”
Takeoff & landing
- IPG’s Mediabrands struck a three-year deal with Amazon Prime to place its clients’ ads on the streaming platform as it ramps up ad-sales efforts. The news comes when Mediabrands is also defending Amazon’s media business as a client.
- Dentsu cemented more of its leadership positions in the Americas under CEO Michael Komasinski. Sean Reardon was named CEO of Dentsu Media; Annette Warring was named chief client officer; and Ryan McHardy was named chief strategy officer.
- Stagwell moved Brand Performance Network/Assembly global CEO James Townsend to be its first CEO of EMEA, overseeing a new London business hub. Taking over at Assembly is COO Rick Acampora who’s been bumped up to global CEO.
“Even private marketplaces are having a really hard time managing bots and made for advertising sites, and bad actors are plugging in somewhere, someway into these systems and providing or abetting the fraudulent activity that the ANA is studying. It may be something that the industry continues to want to brush away or shove under the rug, but it is going to become a much more meaningful conversation as the economy gets tougher. Marketers really will scrutinize their spending.”— Matt Wasserlauf, CEO and founder of Blockboard, a blockchain-based ad platform.
- I wrote about why IPG’s UM replaced its U.S. CEO last week when Joe DiMiero stepped down and chief client officer Erin Quintana stepped up.
- Check out these stories that came out of Digiday’s Programmatic Summit last week, from Kristina Monllos’ take on retail media’s opportunities and challenges, and Kayleigh Barber’s explanation of how programmatic and the creator economy are intersecting.
- Antoinette Siu dove into 2024 economic predictions, from both an independent agency POV, as well what the holding company prognosticators are expecting.
More in Media Buying
The agency holding company has chosen to throw its lot in developing the next iteration of generative AI tools and products with Adobe, per an announcement the two companies made yesterday.
Audio agency Ad Results Media this week launched an audio buying offering to increase programmatic access to streaming and audio advertising.
Traction’s brought in Lauren Evans, a veteran marketer, whose mandate is to navigate the complexity and challenges within client companies and translate it to marshaling the right agency talent and resources.