Multinational agency network Omnicom Group has reported a 6.5% growth in organic revenue for the third quarter of 2024, while the company's adjusted EBITA margin dropped slightly by 0.1% to 16.0%, compared to 16.1% in the same period of 2023.

Analysing the results for Madison and Wall, Brian Weiser confirms that the results are relatively strong next to category peers, with both Omnicom and Publicis ahead of the pack. However, he notes that due to how the company reports its revenue "comparisons for revenues and margins are imprecise at best".

"The reason for this is that Omnicom only discloses (and bases its organic growth rate on) what other agency groups would call gross revenue, which includes pass-through costs such as those related to principal-based trading, while other agencies focus on (and base organic growth rates on) net revenues which exclude those costs. In other words, if Omnicom buys and resells media to its clients, its revenues and organic growth rates will be higher because of the growth in principal-based buying," said Weiser.

Without a net revenue figure to quantify how much of Omnicom's revenue is potentially inflated by pass-through costs, Weiser said it is necessary to look as reported third-party service costs. Those costs rose by the equivalent of 16%, meaning related activities likely inflated by a similar percentage.

" Importantly, if we backed this ‘revenue’ out of Omnicom’s reported gross revenue to calculate a net revenue figure more comparable to what other holding companies report, Omnicom’s organic revenue would have been closer to 3% rather than the as-reported 6.5% figure," continued Weiser.

Omnicom's calculation of organic revenue growth also differs from its peers as it includes growth from recently-acquired companies in current organic revenue figures rather than waiting a year to include those businesses. That, per Weiser, means that this quarter's growth rates are higher than they would have been if the transaction of the relatively fast-growing Flywheel had not occurred.

Omnicom's core advertising and media segment (OMG, TBWA, DDB and BBDO) which represented nearly 60% of revenue, saw its gross revenue grow by 9.4% on an as-reported basis. Precision Marketing grew by 0.8% during the quarter, Public Relations was stronger with 4.3% growth, while Branding & Retail Commerce was down -5.4%.

Experiential businesses, benefiting from the Olympics, were up significantly, growing by 35%. On an as-reported basis, North America was the strongest with 6.2% growth while Europe was up 4.2%. APAC was up more significantly with 10.9% growth while the relatively small Latin America and Middle East regions were also positive with 8.7% and 24.8% growth, respectively.