Summary:

Ad holding company Omnicom Group (NYSE: OMC) has been noted for avoiding the M&A frenzy affecting its peers over interactive ad shops. But t…

Ad holding company Omnicom Group (NYSE: OMC) has been noted for avoiding the M&A frenzy affecting its peers over interactive ad shops. But the WSJ suggests that Omnicom has, up until a few months ago, neglected its veteran online ad subsidiary, Agency.com. Plagued by high profile departures over the past two years, in May, Agency.com returned Chan Suh, its co-founder and chairman, to the CEO seat, with hopes that he could bring it back to its previous success. While he’s replaced the heads of its Chicago, San Francisco and New York offices, and has reshuffled other senior management, the company has kept a low profile in terms of account wins or campaign successes (the company wouldn’t be interviewed, offering the Journal a statement that such announcements would be forthcoming).

Despite that promise, things could remain quiet for a while at Agency.com, as Suh tries to transition the company from its routine work of creating websites and placing ads to crafting digital strategies across a variety of platforms, including TV. The problems it has been wrestling with are being felt throughout ad industry. While large agencies have always maintained their value by offering a series of seamless services, which these days include interactive marketing along with traditional creative work and media buying. But a non-traditional discipline like digital marketing can become diluted when absorbed within those older departmental structures. That’s what appears to have been the case with Agency.com. The Journal piece pinpoints 2005 as the beginning of its fall, when Omnicom realigned its digital holdings within its traditional agencies. Agency.com is overseen by Omnicom’s TBWA Worldwide, though its operations remain outside the creative shop, giving it only a quasi-independent quality that make it difficult to chart a singular course.

Though that structure is still in place, Omnicom CEO John Wren has signaled to analysts that he recognizes the company can’t maintain the same relationship between the traditional and digital sides. But it’s not clear Suh shares those views; according to the Journal, he told an analyst the main problem was lack of talent.

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