eggtimerOmnicom Group (OMC) is a large corporate media services conglomerate.  Arguably, if revenue were the defining criteria, they are the largest advertising and marketing services company in the world. Omnicom got bigger, perhaps even bloated, by gobbling up advertising, marketing and public relations firms.  Most firms in the advertising space define growth through acquisition to broaden both service offerings and geographic reach.

What happens to a culture that is tasked with assimilating into one big melting pot of cross cultures and competing business models that make up the tapestry of a company like Omnicom?   To seamlessly assimilate cultural extremes into a gobble engine of fiercely competing business models must keep the CEO, Mr. John Wren up at night. Sounds like we should call him John Wayne.

Let’s take our egg-cap off to applaud the company for recently declaring a quarterly dividend of 15 cents per outstanding share of common stock.  However, there are some unappeased voices that think Omnicom has diluted investors by issuing far to many stock options than the norm. But what’s better, stock options or increase in salaries and bonuses to compensate employees? It’s a tough trade off.

So what has Omnicom feasted on? Stepping back for one second, let’s examine the current business climate to begin to understand the backside of this gobble-house.

The US advertising services output is forecast to grow at an annual compounded rate of 3 percent between 2008 and 20013. However, ad spending in US, which is a key indicator of demand for advertising and marketing services, fell by 2.6 percent in 2008 compared to 2007. Local newspapers and national magazines were among the biggest losers. On the flip side, to no ones surprise, the demand for digital media is on the rise.

So this gobble induced frenzy has to digest these dynamic sectors.

Here’s a conversation one may hear when hanging out at the company water cooler (bet they still have them!).

Lights on, center stage.

Old style ad agency guy in his Zegna suit with shiny loafers tucked under his neatly pressed pants, beacons to the young hip-tech boy.

Old ad guy: “Hey sonny, how are things over at our legacy mobile device company, MangoMOBILE?”

Hip-tech boy: “Um, well.” (Slightly frowning).

Old ad guy: “What’s wrong sonny, cat got your tongue. Can’t you keep up with us old ad guys?” (Waiving hands in air).

Hip-tech boy: “Um, well, um, sir.” (Slightly amused smile).

Old ad guy: ‘Ever since we bought you guys … wait, why are you smirking?(Old ad guy glances down to check to see if perhaps his zipper is lower than politely governed. Glances back up, relieved).

Hip-tech boy: “Well, sir, it’s just that, um, well, um.”

Old ad guy: “What is it boy, spit it out. Why can’t you guys speak in normal sentences?”

Hip-tech boy: “Well, sir, I was wondering why your fingertips are smudged with purple blotches. Did an ink-cartridge go off in your hand?”

Old ad guy: (Glancing at smudged fingertips). “Of course not. This is from a carbon copy.”

Hip-tech boy: “Oh?”

Old ad guy: (Exasperated) “You don’t know what THAT is? It’s way past your time lad.  Here let me explain. Before you were even born, we had to use carbon copy paper to make our copies. Those were the good old days.” (Reminiscing)

Hip-tech boy: (Noncommittal grunt. Innocently blinking).

Old ad guy: (Not wanting to seem like a complete tech-dumdum) “I use the high-speed printers all the time. But on occasion I still use carbon paper for my notes. What’s so funny? (Squinting eyes) Oh, like I don’t know how to use a printer?”

Hip-tech boy: (Shrugging) “Yes. Sure. Sure, you know how.” (Glancing around, then whispers) “We don’t use printers anymore; we just send tweets on our mobile devices. What’s carbon copy, by the way? Sounds like a dinosaur-thing.”

So there you have it Mr. Wren-Wayne. Your carbon copy executives are slamming into your, hip-tech, tweeting upstarts that significantly contribute to your revenue base. The hip-tech culture is innocently leaping over your perhaps intimidated, printer savvy executives.  And those hip-techs have no idea what a carbon copy is and nor do they care.  Its curiosity appeal is reserved for trips to the Smithsonian.

Is this one big happy conglomerate-family- or what?

From the desk of Enogg Eggbert