Mumbai: Tony Harradine, now chief executive officer (CEO) of Omnicom Media Asia Pacific, is often travelling to India from the company’s regional headquarters in Australia. India is just that crucial a market to Omnicom Media’s international operations, he says.
Harradine, along with Omnicom Media India CEO Kartik Sharma, is overseeing the fusion of the local arms of Omnicom and Interpublic Group (IPG), two of the ‘Big Five’ advertising agency networks or holding companies that agreed to merge last November. The Big Five refers to WPP, Omnicom Group, Publicis Groupe, IPG and Dentsu Group.
Before the merger, Omnicom Group had over 1,500 agencies within its fold, offering advertising, public relations (PR), media planning and other services to thousands of clients globally. The New York-headquartered group, which was founded in 1986, has a presence in more than 50 countries worldwide. Omnicom Media’s agencies include OMD and PHD. Its creative agencies include iconic names such as TBWA, BBDO and DDB.
Like Omnicom, IPG, founded in 1961 and also headquartered in New York City, was a holding company for ad and media agencies. Among its biggest names are media agencies Kinesso and UM, creative agencies McCann, FCB, MullenLowe, and many others. Now, as part of Omnicom, IPG has ceased to exist separately and has delisted from the stock exchanges. With that, the ‘Big Five’ of marketing and advertising have become the ‘Big Four.’
Although labelled a $13.25 billion merger, the deal is playing out as an acquisition, where Omnicom digests overlapping agencies (DDB, FCB and MullenLowe will cease to exist), tech products and roles into a single post-merger company. The combined entity has become the world’s largest media and marketing services holding company, with $25 billion in annual revenue. It now beats new-age upstarts such as Accenture Song, the marketing services arm of consulting and professional services firm Accenture, in revenue.
In India, too, Omnicom has leapfrogged other rivals to become the second-largest media agency network, behind British rival WPP.
Omnicom and its rivals have spent decades operating as networks of media and advertising agencies, constantly buying new ones and merging older ones. But today, though Omnicom has reassured the industry that its biggest agencies will remain, the future of the agency model itself is under question globally.
A model in flux
The business of media and advertising services—buying and planning ad inventory, creating ads, building campaigns, and other projects for a brand’s sales and marketing—has been upended over the last decade. Advertising is dominated by digital channels, which are multiplying every few days. Consumer attention is ever-fragmented, spread between hundreds of forms of media and distribution channels.
Finally, the work that a traditional advertising agency did is slowly getting commoditized or co-opted by newer rivals, including information technology (IT) services and consulting rivals such as Accenture Song, Capgemini Invent, Deloitte Digital and Infosys’ Aster.
Global investors know this. While the Big Four aren’t listed in India, their global parents have underperformed their respective benchmark indices for years. In the last five years, the Omnicom stock remained flat while the benchmark S&P 500 grew more than 60%. Rival WPP has fared worse, with the stock down more than 75% in the last five years, while Japanese ad agency network Dentsu is down by nearly a fourth in the same period even as Japan’s benchmark index grew more than 80%. Only French ad agency network Publicis has managed to push ahead; the stock has provided more than 30% returns in the last five years and outperformed France’s benchmark CAC 40 index.
In 2023, digital advertising surpassed traditional channels in India, per estimates from industry body Federation of Indian Chambers of Commerce and Industry (Ficci) and consulting firm EY. In 2025, digital advertising was worth over ₹96,200 crore, growing over 26% year-on-year, while traditional advertising contracted by about 4%. Digital advertising is now 63% of India’s total advertising industry by revenue.
The industry’s centre of gravity has shifted since the late 1990s. Earlier, creative teams and their heads were the centre of the advertising business. All other departments, such as account servicing, media services (everything from media buying to planning go-to market strategies) and production, played a secondary role. Indeed, media teams remained limited to buying and planning to get a blockbuster ad to the right audience.
Today, however, media services have taken centre stage. This is because reaching the right audience across hundreds of digital channels has become a complex task as the consumer’s attention keeps fragmenting. Media planning, go-to market strategy, and other sales and marketing consulting services are the agency networks’ biggest sources of revenue worldwide.
For example, ‘In Mad Men,’ the iconic TV show on the lives of ad executives on New York City’s Madison Avenue, maverick creative head Don Draper was his agency’s biggest weapon to win new clients or retain existing ones. Today, Draper’s famous carousel ad pitch for Kodak may be accompanied by a crack team offering strategy for performance marketing and e-commerce platforms.
Amid these shifts, a larger question looms over media agencies: does it make sense to have a network of these agencies, especially when many of them offer overlapping services? Omnicom Media thinks so. “We are still big believers in agency brands and what they stand for,” Harradine told Mint in an interview.
Harradine and Sharma say Omnicom and IPG’s biggest media agencies, including PHD, OMD, and Lodestar UM, are crucial to attracting new mandates and retaining existing business, because clients associate each agency with a specialist point of view and a suite of services.
“While they use the same tools like Omni, they differentiate through their teams and mindsets,” Sharma told Mint, referring to Omnicom’s flagship centralized artificial intelligence (AI) platform, which informs all decision making across the corporation. “OMD is a global leader, while PHD has a challenger mindset. Brands are a mix of the tangible—such as the tools they use—and the intangible—their advice, culture, approach. The way you advise an owner-led business versus an MNC (multinational corporation) is different, and that’s where the brand matters. We see value in having individual media brands, unlike some competitors.”
These competitors include WPP, which bundled a number of media agencies together into WPP Media (rebranded from GroupM) and a number of iconic advertising agencies, including Ogilvy, under the newly instituted WPP Creative. Publicis Groupe, too, merged two of its creative agencies together in January last year under a consolidated unit named Leo.
Agency networks have been buying up smaller agencies and merging them over many years to achieve economies of scale. However, this time around, the impact is being felt more by creative agencies than those in media, digital strategy and specialized consulting services.
Omnicom, for instance, has decided to fold iconic creative agencies DDB, FCB and MullenLowe. “Creativity is perishable in the environment we operate in,” Omnicom’s global chairman and CEO John Wren said in an investor day call on 12 March.
Post the merger, 55% of the new Omnicom’s global annual revenue will come from media, data, customer relationship management, commerce and consulting services. This, the company told investors, will likely continue to grow. Advertising will bring in only 18%, global management told investors that day.
Global edge
Even as Harradine and Sharma bet on the endurance of the agency model, Omnicom is centralizing its agencies’ capabilities wherever possible, including having a common tech back end built on tools such as Omni and Acxiom. Besides, Omnicom is known to build brand-specific servicing teams that pull top personnel from across its network of agencies; for instance, it globally operates an agency named Team X, which only works for Mercedes-Benz.
Despite the overlaps and uncertainties among its various agencies, however, Omnicom Media India has bagged new business. Last November, PHD won an integrated media mandate for Marico, the maker of Parachute Oil. Meanwhile, Lodestar UM, which has come to Omnicom from IPG, bagged the integrated media mandate for Amazon Music this January.
More importantly, industry experts say that Omnicom’s globally recognized agencies—and those of its rivals—still have the advantage of global mandates. “Increasingly, there are 2-3 categories of clients,” says Prashanth Challapalli, a Bengaluru-based marketing and advertising veteran. “You have the big ones like Unilever, P&G (Procter & Gamble) and other FMCG (fast-moving consumer goods) and cola giants. They traditionally work with large agencies because the volume of work is very large. So, they want agencies with a certain reputation because they are globally aligned.”
Challapalli added that the India arms of such companies tend to give their mandates to the India arm of their global agencies too. “A globally aligned company operating in India may not have freedom to appoint a different agency in this market,” he said.
Besides, the big growth opportunity in India’s advertising market is the long tail of small and medium enterprises. These are companies that rely on digital advertising to grow and mostly have small advertising budgets. Omnicom and its network rivals, despite their survival tactics, may not have the time or bandwidth to chase this opportunity.
“In India, the opportunity is large, estimated to be at ₹40,000-50,000 crore, but the challenge is how to serve it,” Sharma said. “Beyond technology, India requires a ‘high-touch’ human element. Serving 100,000 small clients requires a different mindset and talent than serving one large client. A small spend of 5,000 bucks is mission-critical for those businesses, and agencies must be on that same wavelength.”
Margin matters
Ideally, a rapidly consolidating industry should begin to command higher margins, as in-industry competition wanes. For now, Omnicom seems comfortably positioned ahead of its rivals globally.
Analysts at the brokerage arm of investment bank Barclays wrote in a note on 23 February that they expect Omnicom to deliver higher Ebit (earnings before interest and taxes) margins once it is done absorbing costs related to the merger, implementing a share buyback, and reinvesting a significant chunk of the post-merger entity’s margins into the business. “We…note that Omnicom’s 16.2% in 2025 (estimated) is already higher than any margin we forecast for any other agency by 2028 (estimated),” the Barclays analysts said in the note, adding that Omnicom will continue outperforming rival networks on margins.
In India, however, filings with the ministry of corporate affairs show that Omnicom Media’s margins may have started to stagnate. In fiscal year 2025 (FY25), Omnicom Media Group India Pvt. Ltd reported a nearly 40% jump in total income year on year to ₹1,085.8 crore, but profit after tax grew just under 6% year on year to ₹109.73 crore. This comes after a massive jump in FY24, when total income nearly doubled to ₹781 crore while profit after tax rose almost 2.5 times to ₹104 crore.
The challenge for Omnicom now is to shift agencies towards higher-margin work as AI and tech/consulting rivals eat at its bread-and-butter media buying and planning business. “High-value specialist services justify higher margins,” Harradine told Mint. “Automation frees teams for consultative solutioning, which commands a premium. We are considering moving toward outcome-based pricing—being paid on business performance rather than just heads or CPMs (cost per mille, a measure of the cost of an ad).”
But, Sharma cautioned, this won’t be easy. “It is hard to attribute business results solely to agency activity when pricing and competition also play roles,” he said, adding that an outcome-based structure could make it harder for an agency to calculate exactly how much of the increase in sales it is responsible for and how to be compensated for it.
Eventually, higher margins will come from specialised lines of work and bigger, better offerings in technology, industry experts say. “Every alternate year, a new technology comes to disrupt this market,” Kumar Awanish, chief operating officer of Cheil SWA, told Mint in an interview. Cheil is an independent media and advertising agency, part of South Korea’s Samsung Group.
“The agency has to see itself as an execution play and invest in technology. The big agencies are taking the inorganic route. But when you consolidate, you have to not only see what is good for the advertisers but also what will help the agency model survive and evolve,” said Awanish. “If you don’t do this, the traditional model will eventually lead to your death.”
