Arthur Sadoun Urges Omnicom to Report Financials Like The Other Big Four Holdcos

Arthur Sadoun is placing public strain on competitor Omnicom to report its financials the identical manner the opposite Large 4 holding corporations do.

Forward of Omnicom’s takeover of Interpublic Group (IPG), set to close this month, Sadoun referred to as for the U.S.-based advert community to report web income, somewhat than gross income, in its monetary updates. 

Sadoun mentioned Omnicom’s present strategy makes it “unimaginable” to check its efficiency at a market degree: “When Omnicom turns into the biggest participant, apples and oranges accounting has to finish, to extend investor belief within the trade,” he mentioned in a speech throughout Morgan Stanley’s European Tech, Media, and Telecom (TMT) convention in Barcelona on Nov. 12.

“What wasn’t an issue after they had been a distant third will turn into one now. Traders and shareholders want clear, comparable efficiency metrics throughout the trade,” he added. 

The Publicis Groupe CEO urged Omnicom to report web income, as WPP, Dentsu, Havas, Publicis, and IPG, which can quickly signify 40% of the “new Omnicom,” all do. 

Sadoun acknowledged that if Omnicom doesn’t deliver its accounting according to its friends, Publicis will begin reporting each gross and web indicators for “a few quarters” earlier than shifting totally to gross.

When approached by ADWEEK, Omnicom declined to remark.

What does it imply?

Primarily based on 2023 figures, the mixed Omnicom-IPG would generate roughly $25.6 billion in gross income, making it the biggest of the “Large 4” advert networks.

At the moment, Omnicom stories gross income, which incorporates shopper billings and pass-through prices. Its friends, in the meantime, publish web income figures, which exclude these prices to indicate solely what the companies truly earn for his or her companies.

Sadoun believes Omnicom ought to measure its efficiency on the identical foundation as its rivals to provide a clearer image of how its IPG acquisition is performing. 

Brian Wieser, founding father of strategic advisory and consulting agency Madison and Wall, advised ADWEEK he could be shocked if Omnicom modified its monetary reporting following strain from Sadoun.

Nonetheless, he agreed that Omnicom’s most popular manner of reporting is “deceptive” and makes any comparability between trade figures “untrustworthy.”