Advertising holding company Omnicom Group Inc. sounded bullish on the future of generative artificial intelligence—which can be used to create new content, including text or images—as it reported fourth-quarter earnings Tuesday.
Omnicom Chief Executive John Wren said his outlook on the technology’s potential impact has evolved. “We’ll be embracing it as quickly as we possibly can,” he said, adding that it would help employees and benefit clients.
“All of the automation that we’re looking at enhances the capabilities and makes the jobs easier for our best and brightest people, and it eliminates a lot of the otherwise mundane projects or activities,” Mr. Wren said on the company’s earnings call Tuesday.
His comments were in response to an analyst’s question about how technology from Microsoft Corp. -backed OpenAI could affect Omnicom’s business and the advertising market overall. Microsoft is integrating the ChatGPT tech into its Bing search engine.
New York-based Omnicom owns agencies including BBDO, DDB and TBWA.
The company reported organic revenue growth of 7.2% in the fourth quarter, beating the average analyst estimate of 3.7% organic revenue growth, according to FactSet.
Organic revenue growth was 9.4% for the full year, the company said, beating the average analyst estimate of 8.4%.
The company said it is forecasting organic revenue growth this year of 3% to 5%.
Organic revenue growth is a metric that removes the effects of currency fluctuations, acquisitions and disposals.
“We enter 2023 with a high level of confidence in our strategic and financial position while remaining cautious and being prepared for possible changes in the geopolitical and macroeconomic environment,” Mr. Wren said on the call.
Omnicom competitor Publicis Groupe SA last week said its organic revenue grew 9.4% in the fourth quarter as its data and technology services continued to capture a shift in client spending. The company said it hasn’t yet seen a major shift in client behavior despite an uncertain macroeconomic backdrop.
Omnicom posted net income of $429.8 million, or $2.09 a share, for the quarter ended Dec. 31, compared with net income of $416.2 million, or $1.95 a share, a year earlier. Reported total revenue in the fourth quarter of 2022 increased 0.3% to $3.87 billion versus a year earlier.
The company said it is helping clients navigate an increasingly complex media landscape, including the proliferation of advertising platforms from retailers and other businesses. Walmart, for example, has developed technology that allows advertisers to use data collected from its customers to target ads to shoppers across the web.
“The more complexity, the more in-demand our services are,” said Phil Angelastro, executive vice president and chief financial officer, on Omnicom’s earnings call.
Write to Megan Graham at [email protected]
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