One firm that is accelerating the use of artificial intelligence in its marketing and advertisement processes is the Omnicom Group, which is among the largest advertising and marketing services firms across the globe. With the shift that the use of AI is creating in the way this company conducts its business, the industry experts and other stakeholders of the company believe that the revenue model of the company would also shift due to the changes AI will bring about.
Omnicom was an organization that favoured the traditional model of client-based billing and human involvement in any type of creative process but, as it has been the case with many other companies, Omnicom has now started to reap the benefits of AI integration into the very process of doing business and is making gradual steps towards a change of how the company delivers value, and, at some point, monetizes it.
Inside Omnicom’s AI Evolution
Even in the past few years alone, Omnicom has been doing this in a very unobtrusive yet very dynamic approach, implanting AI tools into its global network of agencies. During these times, the cooperation of these tools is associated with the help of:
- Creative concepting using generative AI
- Audience segmentation and personalization at scale
- Media planning and optimization through predictive analytics
- Performance tracking with real-time AI-driven dashboards
Recently, the company has also launched its own in-house AI platform named, Omni, which is an attempt of integrating all the data, learnings and tools of creativeness in one platform.
“Paul Buckley, the CEO of Huge has stated that it will not usurp creativity with the use of AI, but it will increase. This would require a team days to perform, but now can be done in minutes. Speed, is what has strategy.”
From Workflow to Value Chain
In other words, that presupposes: It is transforming the entire marketing ecosphere, reducing human workforce, by shortening the time, and offering packaged versions of the creative landscape in terms of ideas as never before.
What this will have in a hands on sense:
- Campaigns can be deployed faster
- Insights are more predictive, not just historical
- Content personalization becomes more precise
- Budgets can be optimized in real-time
This results in greater efficiencies to the clients, added measurability and less wastage causing strain on the conventional modes of billing at Omnicom.
A Revenue Model in Transition?
Conventionally, Omnicom has been paid either on a fee basis or on retainer agreement or on a percentage of spend. It is a sector in which exploration is still very early:
“One of the questions that were posted by the media analyst, Amanda Greene was, most of the agencies can give you work in 40 percent less time, and with better result, do you charge less, or different? That is where all the companies are driving to the crossroads, especially Omnicom companies.”
The resulting outcome may be that traditional pricing will no longer be sensitive to the value of the clients due to the arrival of the AI tools to perform better with lower rising marginal costs and more rapidly rendered work. The cost would also be based on the results of the campaign with a customer being charged based on the results of the campaign.
- Outcome-based pricing (billing based on campaign performance)
- Subscription or platform access models (licensing tools like Omni)
- Shared IP models for co-created AI-generated content
Competitive Pressure from AI-Native Entrants
Digital-first agencies and startups founded on AI at the ground floor are already experimenting with novel pricing structures that can maintain clients at a small charge of what they used to get campaigns that are supported by AI.
The question and opportunity Omnicom has is how to exploit its size and data capability in the background of being more flexible and transparent in pricing strategy in context of efficiency of AI.
“You cannot commoditize time when there is a clock ticking away, said a marketing transformation consultant Mark Rosenthal. In 2023, Omnicom announced a partnership with Microsoft and other major suppliers of AI and the multi-year deal seems to be the development of the Omni operating system.”
Omnicom’s AI Investment Signals Long-Term Shift
In addition, the company has been spending more on unique teams of AI and information plumbing, as well as privacy compliance. The signals of the payoff are to be observed in the last quarterly reports:
These step ups have reflected that AI is not a fad, it is part of the very fabric of the company strategy.
It has had some reciprocity in its results as the latest quarterly reports reveal:
- Reduced campaign delivery times by 35%
- Improved ROI for clients across media verticals
- Increased margins in digital and programmatic services
However, Omnicom has not made any open statement on how it will reorganize new services where it can vary prices on the basis of how AI will be used to reduce delivery expenses. Investors are anticipating that the strategy will get cleared within the next 12-18 months.
Risks and Responsibilities
In addition to the above, with AI being increasingly incorporated into client work, Omnicom, and other companies of the same Caliber, needs to navigate:
- Transparency: Explaining how AI is used in campaign creation
- Bias and ethics: Ensuring algorithms do not reinforce harmful stereotypes
- Creative ownership: Clarifying IP rights for AI-generated content
- Client trust: Maintaining confidence in outcomes produced with machine assistance
When applying AI so fast, there is a possibility of confusion among the clients or even giving them mistrust in case the AI results are excellent without any concrete communication and measurement norms that one might end up confusing the client.
The Future: From Agency to AI-Enabled Marketing Partner
Artificial intelligence has already entered into the applied sphere of the advertisement. Omnicom is taking the lead in the marketing services development, optimization and distribution revolution.
The most drastic change that has been looming though is how those services would be sold.
“The business model as well is in the process of changing right in front of our eyes as Greene has highlighted. In the coming future, Omnicom will be able to change its position as a single agency of record to another company that provides strategic platforms like the subscription of the provider driven by AI.”