Shub Mukherjee – VP John Wren – President and CEO Phil Angelastro – EVP and CFO.

Alexia Quadrani – JP Morgan Craig Huber – Huber Research Partners David Bank – RBC Capital Markets William Bird – FBR Tim Nollen – Macquarie Ben Swinburne – Morgan Stanley John Janedis – Jefferies.

Good morning, ladies and gentlemen, welcome to the Omnicom Group Third Quarter 2014 Earnings Release Conference Call. At this time, all participants are in a listen-only mode. Later we’ll conduct a question and answer session and instructions will follow at that time. (Operator Instructions) As a reminder this conference call is being recorded.

At this time I’d like to now introduce you to the host for today’s conference call Shub Mukherjee. Please go ahead..

Good morning. Thank you for taking the time to listen to our third quarter 2014 earnings call. On the call with me today is John Wren, President and Chief Executive Officer and Phil Angelastro, Chief Financial Officer.

We hope everyone has had a chance to review our earnings release we posted on the Omnicomgroup.com website, both our press release and the presentation covering the information that we will be reviewing this morning. This call is also being simulcast and will be archived on our website.

Before we start, I have been asked to remind everyone to read the forward-looking statements and other information that we have included at the end of our Investor Presentation, and to point out that certain of the statements made today may constitute forward-looking statements and that these statements are our present expectations and that actual events or results, may differ materially.

I would also like to remind you that during the course of the call, we will discuss some non-GAAP measures in talking about Omnicom’s performance. You can find the reconciliation of those measures to the nearest comparable GAAP measures in the presentation material.

We’re going to begin this morning’s call with an overview of our business from John Wren. Then Phil Angelastro will reveal our financial performance. And then John and Phil will be happy to take questions..

Thank you Sue, good morning. Before I get started, I want you to welcome Phil to the call, as Omnicom’s new Chief Financial Officer. In the last week’s, many of you have had a chance to speak or even meet with Phil.

He’s been a key member of our executive management team for over 15 years, and has worked closely with Randy and me on our quarterly calls and our key financial and operational strategies. At Omnicom, we place a considerable emphasis on succession management planning. For several years Phil had been designated as Randy’s successor as CFO.

Our board of directors, our senior managing team, and I, are confident this will be a seamless transition for Phil, and I’m pleased to have him by my side. Before getting to the quarter, let me emphasize that Omnicom’s operational and financial strategies remain unchanged.

Turning to the quarter, we delivered good results with organic growth up 6.5% over the same quarter last year. Our growth was driven by new business wins in late 2013 and earlier this year, as well as strong performance in some of our core strategic growth areas, which I’ll touch upon in a few minutes.

Year-to-date, our organic growth rate is 5.6%, so we are on track to exceed our target for the full year. On the margin front, we had a slight decrease year-over-year of one-tenth of 1%. In absolute dollars, that difference to flat margins was insignificant, less than $4 million, and the result of several factors.

Phil will provide more color on the margins, in his remarks. At this point, we remain committed to maintaining flat margins year-over-year in the fourth quarter. Even in the face of ongoing challenges in the macroeconomic environment, and increased volatility in currencies.

Turning to our cash flow, we remain committed to our longstanding capital allocation strategy, using our strong cash flow generation to, first, pay dividends. Second, to make acquisitions that are accretive to our shareholders, and lastly, employing the remaining cash to repurchase shares.

As you recall, in May we increased our quarterly dividend by 25%. Since 2010, we have increased our quarterly dividend from $0.20 a share to $0.50 a share.

On the acquisition front, during the quarter we acquired The Planning Shop International, a research based consultancy focused on the healthcare Industry, and chosen a full service agency with shopper marketing and promotional capabilities in Turkey.

And since we resumed our repurchase program in mid-May, we’ve purchased approximately 11.7 million shares, totaling $830 million. Our repurchase program will continue in the fourth quarter and for 2015. We continue to be committed to our key strategic and initiatives, which as you know are, attracting, retaining, and developing top talent.

Expanding our global footprint and moving into new service areas, building our digital, data and analytical capabilities by investing in our agencies and partnering with innovative technology companies. And delivering big ideas based upon meaningful consumer insights across all marketing communication channels.

Let me now provide some more detail on our revenue. As I said, total organic growth for the quarter was 6.5%, our results were broadly positive across disciplines and geographies with our media business performing very well. About 1.5 % of our total organic growth is due to our programmatic line business, which is included in our media operations.

Recently, there’s been a great deal written about programmatic buying, and there is a lot of client and investor interest in this area. To put it in perspective, we expect for the full year 2014, programmatic buying will be less than 2% of Omnicom’s revenue.

So while this area is relatively new and presents good opportunity for growth, and we are very comfortable with our position and investments, it is still small today.

Looking at revenue by geography, North America’s growth was 8.9%, which was driven by continuing strong performance in brand advertising, and specifically our media business as well in PR. In Europe, organic growth was 2.6%, with broadly positive result across the region.

The UK was relatively strong, continental Europe was mixed, with the Euro markets slightly negative overall, and the non-Euro markets performing quite well in the quarter.

At this stage, we’re not seeing any significant effect to do the geo-political risk in Eastern Europe, but given the macroeconomic environment, we remain cautious about the region generally. In Asia, growth was 4.4%, China and India experienced double-digit increases, and Australia also performed well.

And in Latin America, Brazil had high single-digit growth, although results were way down by individual agency performance in some of the smaller markets in the region. Overall, I’m pleased with the performance of our agencies during the quarter, and through the first nine months of the year.

Our management teams continue to be focused on executing for our clients, winning new business, and remaining diligent in controlling their costs. I’d like to now take some time to discuss our data and analytic strategy in more detail. It was a notable quarter for Omnicom, in terms of partnerships with technology companies we signed.

We signed a new agreement with both Salesforce and Facebook, these agreements are part of a multiyear effort that began when we founded Annalect, our primary data and analytics product platform, five years ago. Data and the insights we gather from it provides a foundation that can be leveraged by all of our agencies.

Annalect is an Omnicom wide platform that is used by our media, advertising, PRM and PR companies. Starting in 2009, Annalect began investing in a data managing platform or DMP, to provide our agencies a common set of products to unify and analyze data.

Since that date, we’ve invested tens of millions of dollars in the business, and it now has over 15,000 people around the world. Annalect’s products give us a competitive advantage, both in measurement and in insights, that can be leveraged across all of our businesses.

In conjunction with our already existing partnerships, the recent Salesforce and Facebook agreements add more capabilities to our DMP. Saleforce is first priority customer data, will be a particular value to our CRM agencies, as they use Annalect products.

The Facebook deal provides first party social media profile data, linked for the first time, to a specific consumer, and across devices. Securing first party data, increases our ability to target consumers, customize content, and measure results.

All of which are increasingly important as advertiser ship for mass marketing to mass personal organization. One of the primary businesses leveraging Annalect’s products is our programmatic buying operations. This is a rapidly changing area, and we are also evolving our businesses to ensure that we have the capability to service all of our clients.

As you know, Accuen is our largest, display mobile and online video programmatic buying unit. It is a performance-based business, which employs people, data, and technology to deliver precise audiences to advertisers.

As a result advertisers who opt in, achieve their desired performance objectives, and greater efficiencies at an all in price, as compared to conventional digital media buyers. We also offer programmatic buying services through our media agencies.

Our media agencies use the same underlying technology platforms to offer these services to their clients, although the agency-based operations are a much smaller part of the programmatic revenues. Programmatic is an important offering for our clients and for Omnicom, due to the expected growth in mobile and online video.

Forrester Research recently projected that North American display spend was still a relatively small part of the overall ad market, will almost double to $38 billion by 2019, driven by these areas.

Since the fourth quarter of 2013, due to improvements in audience, data management right from our DMP and our rapid expansion in international markets, we have been seeing a meaningful increase in demand from our clients for our programmatic buying services.

Today we offer these services in more than 30 markets around the world to more than a 1000 advertisers.

Overall we are extremely well positioned to capitalize on this opportunity because of our early and ongoing investments while Annalect provides a foundation for data and insights from Omnicom’s agencies it is the talent that these agencies and the collaboration across our companies that allow us to consistently deliver on our strategies.

I’ve spoken many times about the growing importance of collaboration and servicing our clients from providing seamless execution of big creative ideas across disciplines and geographies. As one example of this, you may have seen the campaign for SAP, which was launched yesterday.

We won the accounts in July with multiple Omnicom agencies working together to create a simple, powerful brand story for SAP. Omnicom agencies also continue their tradition of being the most creatively awarded companies in the world, which is a credit to the challenge that we have in place.

Let me just mention a few of the highlights from the Spikes advertising Festival, which is considered the Cannes of Asia. BBDO received the top honor winning network of the year, with DDB placing second.

This is the second time in three years that BBDO was named network of the year at Spikes, and Omnicom networks have finished in the top three networks for six consecutive years. PHD won media network of the year, with OMD placing second. DDB’s group in New Zealand was runner up as agency of the year.

All total 40 agencies in 12 countries, contributed to Omnicom’s performance at this year’s Spikes. I want to congratulate all of our people and agencies for their award winning work on behalf of our clients in this very important Asia-Pacific region.

Our investments in talent, technology and partnerships are making a difference for Omnicom and our agencies, they are critical to our success. We will continue to strategically invest in these growth areas as the marketing environment becomes increasingly complex.

Before handing the call over to Phil, I once again want to thank the people of our agencies for the world class integrated campaigns outstanding new business wins, and all the great work that has enabled us to continue to deliver strong results for Omnicom, our clients, and our shareholders..

Thank you John and good morning. As John said, I’ve worked closely with him and Randy and the rest of Omnicom senior management team for a long time. And although this is my first earnings call as CFO, I’ve been a part of more than 60 of these calls in my prior role as Controller.

I want to start by thanking Randy for all of his guidance and support over the years. I will certainly benefit from it in my new role, and it had helped to prepare me for the transition. I’ve met many of our stakeholders over the last month. And I look forward to meeting more of you over the next several weeks and months.

And now we’ll focus on our results for the quarter. As John said, we are very pleased with the performance of our operating companies. They have continued to deliver against their operating and strategic objectives, while maintaining their focus on meeting the needs of their clients.

Their continued excellent performance has also helped make this an easier transition for me. As a result of the excellent performance of our agencies, revenue for the quarter came in at $3.75 billion up 7.4%.

Year-over-year increase was driven by continued strong organic growth of 6.5%, with small contributions to our growth in the quarter, also coming from net acquisitions and FX net. We’ll review our revenue growth in further detail in a few minutes. A quick note before we review our operating income and the rest of our results.

As a reminder we terminated our proposed merger with Publicis in the second quarter of this year. In the third quarter of ‘13 we incurred $28.1 million of cost related to the transaction. These costs are included in our reported GAAP results for 2013.

In reviewing our performance for the quarter, my comments will compare the current quarter to last year’s Q3 results, excluding the impact of the merger related expenses, which you can find in the supplemental non-GAAP information on slides 19 through 25.

Our EBITDA for the quarter increased to $461 million from $433 million, an increase of 6.3% compared to Q3 last year. The resulting EBITDA margin for the quarter was 12.3% down about 10 basis points versus Q3 last year. The slight decline can be attributed to FX impacts and business mix.

Keep in mind that a 10 basis point decline is less than $4 million. Although FX this quarter had a slightly net positive impact on revenue, the increase was largely driven by the strengthening of the British pound against the dollar, compared to the third quarter of 2013. Almost all other major currencies weakened against the dollar this quarter.

And in some of our higher margin markets, mainly Russia and Canada, where FX was negative in the quarter, this also negatively impacted our margins. In addition to the FX impact, our margins were negatively impacted to some extent by our mix of business in the quarter.

From the bottom up this quarter, as an offset to the items that negatively impacted our margins, we had solid performance across the portfolio in our efforts to drive efficiencies throughout our organization and our agencies. Operating income or EBIT performed similarly to EBITDA, increasing $26 million or 6.4% to $434 million.

And as was the case with our EBITDA margin, our operating margin of 11.6% was down about 10 basis points versus Q3 2013, due to the items I described earlier. Net interest expense for the quarter was $31.4 million down $2.3 million from $33.7 million in the second quarter.

The decrease in net interest expense versus Q2 was primarily related to the full quarter impact of the fixed to floating interest rate swaps we entered into during the second quarter of this year, related to our 2022 senior notes, versus the last year net interest expense was down $11.4 million in the quarter due to the positive impact of the interest rate swaps, plus benefits from our cash management efforts in the form of increased interest income earned by our international treasury centers.

Our quarterly tax rate of 33.4% is in line with our normal expectations, while we are always looking for ways to improve the efficiency of our tax structure, given where we are currently; we expect our operating tax rate for the year to continue to stay around 33.2%. Earnings from our affiliates increased $1.5 million in the quarter to $5.8 million.

And the allocation of earnings to the minority shareholders and our less than fully owned subsidiaries increased to $1.1 million to $29.8 million. As a result net income was $244 million, that’s an increase of $26.1 million or 12% versus Q3 last year and an increase of 24% compared to the 2013 reported amount.

Remaining net income available for common shareholders for the quarter, after the allocation of $4.3 million of net income to participating securities was $239.5 million, an increase of 12.8% versus the third quarter last year.

You can also see that our diluted share count for the quarter was $252.4 million, which is down 2.9% versus last year as a result for the resumption in the second quarter our share buyback program.

Given our overall strong performance in the quarter, diluted EPS for the quarter was $0.95 an increase of $0.13 or 15.9% versus Q3 2013, are up $0.21 and 28.4% compared to the 2013 reported amount. In the presentation we also provided the summary P&L, EPS and other information for the year-to-date period.

To save some time, I’ll just give you a few highlights. Revenue was up about 5.7% for the nine month, driven predominantly by organic growth, with FX and net positive, an acquisitions are slight negative as we cycled on the disposition of our recruitment marketing business in Q2.

EBITDA increased 4.6% to $1.44 billion, and our EBITDA margin was 13% year-to-date and similar to Q3 it was down about 10 basis points versus the last year. Also included in the current year’s EBITDA amount, there’s a reduction of about $8.8 million from merger related costs incurred earlier in the year.

Now, moving back to the topline revenue performance on slide 7. First with regard to FX, Overall it was net positive, it remains very mixed. On a year-over-year basis the US dollar weakened significantly against the UK pound.

However, on a year-over-year basis, the US dollar also strengthened against most other currencies, most notably Canada and Russia, as well as Japan. The net results increased our revenue for the quarter by $13 million, or about four-tenths of a percent.

Looking ahead, if FX rates stay where they are currently, FX could be a negative to revenue by approximately 220 basis points in Q4, and it could also turn negative for the year by over 50 basis points.

Revenue from acquisitions net of dispositions increased revenue by $20 million, as mentioned during last quarter’s call; we’ve now cycled through the Q2 2013 sale of our recruitment marketing business. And our recent acquisitions in the UK, Germany, and Brazil are positively impacting revenue.

With the transactions that we have completed through September 30th, we currently expect acquisitions net of dispositions to add about 60 basis points to revenue in the fourth quarter, making the full year acquisition impact about flat. Organic growth was positive $226 million or 6.5% this quarter.

It was a strong quarter with positive growth across most of our major markets, with the exceptions being Canada, Chile, France, Italy, and the Netherlands.

The primary drivers of our growth this quarter included continuing excellent performance across our media businesses, especially in the U.S., this is being driven by both new business wins and the continuing development of new media offerings.

Also, in addition to strong performance in the U.S., our agencies in emerging markets continue to perform very well. This quarter we had excellent performance in Brazil, China, India and Mexico, as well as South Africa and the UAE.

While businesses in Russia are still performing well, but the rate of growth slowed a little in Q3 relative to prior quarters. And while remaining uneven by individual market, we continue to see generally good performance in our businesses in the non-Euro markets in Europe, including Poland, Turkey and Sweden.

And flat to slightly down performance in our businesses in the Euro markets with the larger French market’s still struggling. Slide 8 covers our year-to-date results, which are basically in line with the quarter, although net acquisition disposition revenue was marginally negative year-to-date.

Slide 9 shows our mix of business for the quarter, which again is split about evenly between advertising and marketing services. As for their respective organic growth rates, brand advertising was up 12.5% primarily driven as I mentioned by the excellent performance of our worldwide media businesses.

And marketing services overall was up 1.1%, within marketing services CRM was up 1%, we experienced mixed results in our businesses in the discipline. Our field marketing and sales promotion businesses had strong performances this quarter, offset by weaker performances in some of our events and branding businesses in Europe.

Public relations was up 2.5% reflecting strength in the U.S. and Germany.

And specialty communications was down about 10 basis points; however the underlying performance in the quarter remains good, as we were up against difficult comp number from last year on our healthcare businesses, which had year-over-year organic growth nearly 15% in the third quarter of 2013.

On slides 10 and 11, we present our regional mix of business, during the quarter the split of 57% for North America, 28% for Europe, 11% for Asia-Pacific with the remainder split between Latin America and Africa and the Middle East.

Turning to the details on Slide 11, in North America we had organic growth of 8.9% again primarily driven this quarter by the performance of our media and PR businesses. Our other major regions all continue to have positive organic growth as well. Europe was up 2.2%, led by continuing strong performance in the U.K.

and solid performance in our other non-Euro markets in Europe. While France and Netherlands continued to struggle. Asia-Pacific was up 4.4% with strong performances across most of the region with China and India leading the way with double-digit growth. Australia also had a solid quarter and Japan had modest growth.

Latin America was up 2.5% led by Brazil and Mexico and offset by weakness in Chile, related to a client specific spending reduction. And Africa and the Middle East was up 18.1% as mentioned earlier, or be it off a relatively low base, led by a very strong quarter from our businesses in South Africa and the UAE.

On slide 12 we present our mix of business by industry sector, keeping in mind these are the year-to-date figures, the total growth, not just organic growth. The one item of note to mention, the telecom sector is down primarily from the loss of Blackberry.

Turning to our cash flow performance on slide 13, we generated almost $1.125 billion of free cash flow, including changes in working capital during the first nine months for the year. As for our primary uses of cash on slide 14, dividends paid to our common shareholders were $341 million. This was up significantly from the last year.

As a reminder, in 2013 we only made three dividend payments because we paid our normal Q1 dividend in the fourth quarter of 2012. Additionally this quarter’s dividend payment reflects the 25% increase in our quarterly dividend to $0.50 per share that was approved by our board earlier this year.

Dividends paid to our non-controlling interest shareholders were $83 million, capital expenditures of $138 million was up about $15 million from the same period last year, in line with our expectations. Acquisitions, including earn-out payments, net of proceeds received from the sale of investments, totaled $155 million.

And finally, stock repurchases net of the proceeds received from stock issuances under our employee share plans, totaled $830 million. As I mentioned earlier, we restarted our share repurchase program in mid-May and so far we have purchased about 11.7 million shares net.

As a result, we outspent our free cash flow by about $422 million for the nine months. Turning to Slide 15, focusing first on our capital structure, as you may be aware in June, we called our last convertible notes for redemption at the end of July.

As a result of the redemption, our gross debt position decreased by about $240 million to $3.8 billion as of September 30th. And our net debt position at the end of the quarter was $2.96 billion, up about $440 million.

The increase on our net debt over the past year was driven in large part by the use of our cash to increase our share buybacks by $220 million. Also to increase our dividend payments by $70 million, as well as the negative impact of FX translation, which was in excess of a $100 million.

Our ratios remain very strong at the end of September, our total debt-to-EBITDA was 1.7 times and our net debt-to-EBITDA ratio was 1.3 times, due to both a decrease in our interest expense and increase in EBITDA, our interest coverage ratio improved to 12.0 time. I should also mention that during the quarter we amended our bank credit facility.

Expanding the term of the facility to July 2019, from 2016, or the size of the facility remains unchanged at $2.5 billion. Turning to slide 16, we continue to successfully build the company for a combination and prudently priced acquisitions, and well-focused internal development initiatives.

For the last 12 months, our turn-on invested capital increased to 17.2%, return on equity increased to 33.7%. And finally, on slide 17, we track our cumulative return of cash to shareholders in 2004. The line on the top of the chart shows our cumulative net income from fiscal 2004 to September 30th of this year, which totaled $9.7 billion.

And the bar show cumulative return of cash to shareholders, including both dividend and net share repurchases, but some of which during the same period, totaled $10.5 billion, our cumulative payout ratio of 108%. And that concludes our prepared remarks.

Please note that we’ve included a number of other supplemental slides in the presentation materials to be overviewed, but at this point we’re going to ask operator to open the call for question..

(Operators Instructions) Our first question today comes from the line of Alexia Quadrani with JP Morgan, please go ahead..

Thank you, thanks very much. Can you let us know how much momentum I think you’re in your programmatic buying business, I mean once you start circling the comps I guess, do you think there’s still going to be great growth in that business, are we just sort of, any sort of color in terms of giving us where we are in this cycle.

And also on the margin front, do you think it has a negative impact on overall profitability or less than 2% of revenue’s really not making an impact at this point?.

Good morning Alexia, I think its early days, with respect to programmatic; we’re just developing the skills and refining them. And the technologies come up really on board in the last 12 – 13 months, which enables us to better target our audiences.

If what projections we read, and we’re told by our own media people are true, more and more media will be purchased in this fashion as we get into 2015 and into the future.

We don’t have, at this point, because it’s so new, because these shifts are happening at such a rapid pace, we don’t have an accurate forecast to give you over the phone, as to how fast this business, which is currently 2% of our businesses is going to grow in the fourth quarter and throughout next year.

But we’re very comfortable that it’s going to be at least double-digits. And with respect to margins, I don’t believe you attribute the margin decline of a tenth of a percent, to any one particular item.

Phil mentioned a few, and we continue to invest in the very bright people that become available on the marketplace, when they become available on the marketplace. Because we know that they’ll pay huge dividends to our growth in the future..

One thing to add Alexia, we certainly did see an increase in programmatic demand beginning in the fourth quarter of last year, late in the third quarter and into the fourth quarter. So we’re certainly aware of them this year, but optimistic about the growth in the future..

Again John, just one follow up, you’ve got such a great perspective on sort of the overall advertising market. I guess if you could give us your opinion or some color of how advertisers are seeing overall budgets and spending levels, it sounds from everything you’ve said here, and your great results that clearly – spending seems very healthy.

But there’s a bit of nervousness among the investor community, towards the perception on advertisers are kind of abandoning TV and moving to digital.

I guess in your opinion, do you think there’s a big, much more notable change this year on that front, or is it more a continuation of a trend we’ve been seeing for a while?.

I don’t well, First of all, marketing budgets continue to grow, clients though, especially when it comes to TV, there has been, I’d say, a shift there’s like – when you look at traditional areas, like the upfront and the scatter markets, and you went back a couple of years, there was an urgency on the part of appliance to make certain that they didn’t miss out on the programming that they wanted.

With all the various choices of how to reach the audiences you need to reach today, and our ability to do it, there wasn’t that urgency going into the first – to the upfront this year. And with respect to the scatter markets, I think you’re seeing money being diverted into other areas.

I believe that trend will continue, I don’t think TV’s dead, I just think that there’s going to be a shift.

And oddly enough, when you look at it, or when I look at it, as an investor, some of the people from – a great number of the people that own the content that we’re going to want to be able to use to put online, is part owned by, what you would refer to as the traditional media owners.

So they may not get the money out of TV, they may get it out of some other source, but I just see the complexity changing some of the rules that were easy to live by in the past..

Alright, thank you very much..

And next we’ll go to the line of Craig Huber with Huber Research Partners, please go ahead..

Yes, good morning, and John if you could just give us your current thoughts I know it’s early here but as you think after 2015 where your, general senses from your clients, what their marketing budgets may look like next year, I have a follow up question too, thank you?.

Okay, it’s a bit early for me to be giving you forecasts at the moment Craig, our companies, our agencies are in the process of doing that right now. And we’ll be reviewing it with them from; I think it’s probably next Monday, all the way probably through December.

My sense is that the United States remains healthy, it’s a good market to be in and I don’t see too much in the way, that’s going to get in the way of slowing down the pace of growth in the States. Once you get outside the United States, there’s a lot of trouble in the world, we don’t have much hope for real economic growth in the Euro for next year.

Again, we haven’t seen it reflected in our budgets, but because we haven’t done that budgeting yet, but the Euro is a concern, certainly after – although it’s small offers, it remains a concern. Brazil’s had some difficulties, which I think will continue and may impact just a little bit.

So we’re pretty balanced and conservative in anticipation of getting the information, but I don’t know how helpful that is. I feel cautiously optimistic; I guess you’d say, it’s certainly still early for us, but the process at our operations and our agencies has begun.

In addition of spending some more time with the agencies on Q4 in the next few weeks, we’ll be spending more time on the ‘15 as we go. One other thing that bodes well for us, and the year’s not over, is we’ve had fewer losses this year, just cycle against next year.

So putting currency aside, there’s less headwind as we see the –, but we’re certainly confident that we’re well positioned both in terms of the disciplines we’ve been investing in, in the overall balance in the company..

And also John, in North America, again revenue growth up 8.9%, it’s obviously quite an acceleration from the first half of this year, the prior three years frankly.

What has changed in your mind, in your business, why was up so strong here in North America?.

As I said, problematic came on board for us, we really – even though we’ve been investing in it, it came on in earnest in the fourth quarter of last year, so there was a contribution from that that. Again at the end of last year, we had fewer losses than in the same period the prior years is cycled through and we’re up against.

And we’ve had a pretty good run this year from a new business point of view, and securing client budgets. So I think it’s a cumulative of all that and probably one or two things I’m forgetting to mention, that has contributed to our growth..

And then finally Phil, if I could just ask you for – the UK, you guys mentioned it was relatively strong I guess, in the quarters.

I mean organic revenue in the UK was up say 7% to 9% versus a year ago?.

I don’t have the number in front of me at the moment, but it was certainly – give me a second here and we’ll check it, I think that’s probably a good range. Maybe it’s a little on the high side, it’s probably more in the 5 or 6 range this quarter..

Thank you..

And our next question is from the line of David Bank with RBC Capital, please go ahead..

Hey, thank you very much guys. So I want to follow up on the first question a little bit, that Alexia asked, which is, I know we’re dealing with lot small numbers today. But at what point does that revenue contribution from programmatic need to be before you indicate that it’s moving the toggle and profitability.

So the quarter, would you say 10% of our revenue is now coming from programmatic and that’s moving the toggles. Is there some movement like that? And then the second question is, when you look at the data, programmatic business mix.

If you look at that kind of 200 basis point’s contribution, how much of that is coming from owned media and the sense that you’re profiting from your owned media, thanks very much?.

I’d be happy for it to be 10% of a growing business, I’m certain I don’t have those projections in front of me, my media people aren’t signing up for those kinds of numbers yet. I would imagine it will take that level of contribution before it starts to impact the rest of Omnicom, because the rest of Omnicom is so large.

Don’t know if I’m answering your question exactly, but if not –.

So quite a ways away before it’s a toggle on margin?.

Yes I think so, in any meaningful fashion, because the company is so large. We run a business on the –.

I was just – on the owned media contribution?.

Yeah, I mean if you’re comparing us to say, what Xaxis claims it does, we haven’t gone out yet and looked for non-Omnicom clients, nor gone out and purchased inventory in any meaningful fashion.

We’re studying what they’re doing, and when I also listen to them, and I listen as carefully as I can, they claim to have a significant business in Xaxis in Europe, much more significant than ours. I view that as a huge opportunity that we have to sort through and because there’s no reason to believe that we can’t be impact full there as well.

Yeah I think we –, it’s early days, so we’ve certainly been exploring a number of different approaches, but we’re only occasional – we’ve only occasionally, opportunistically moved forward on –.

I’d just like to –. Thank you, guys..

We’ll go to the line of William Bird with FBR. Please go ahead..

Thank you.

Thanks for the additional detail on margins, Phil, when you referred to the negative impact of mix, what areas specifically are you referring to? And then on programmatic, are the margins for that business any lower than your other businesses?.

Can you repeat the second part Bill?.

Sure, how does the margin profile look like for programmatic, is it at the average or is it below?.

I think we’ve got a limited history with Accuen at this point, it’s relatively new, it’s obviously rapidly growing. We’ve been making some significant investments over the last few years here. We expect it’s going to achieve margin levels over time, similar to the rest of our media business, so we’re taking a longer term view on the business itself.

And we’re very excited about the opportunity, but we’re trying to find the right balance for our overall business and for that business in particular. We do have some fulfillment businesses that we’ve talked about in the past, certainly in those businesses that they don’t require a lot of capital, they give great returns.

And our primary focus is on EBIT dollars as opposed to the absolute margin percentage. So that’s certainly at any one quarter can have an impact on our mix..

And just separately on programmatic, is there any difference in the way you account for it and recognize revenues versus your other media buying businesses?.

Well I think we follow GAAP and we’ve always tried to be clear and consistent and straight forward about it, but the vast majority of our media businesses, we act as an agent. So there is a difference in the model versus the Accuen model. And the Accuen model we agree to some specific advertiser performance objective’s up front, we agreed the price.

And the price includes the whole package and the cost and execution risk is Accuen, so it’s not an agency model, so there is a difference there..

Thank you..

Our next question is from the line of Tim Nollen with Macquarie. Please go ahead..

Hi.

Thanks, a couple things please if I could just try to characterize your comments on life outside the U.S., is it fair to say that you haven’t necessarily seen any risk or pullback to spending, but you’re certainly vary of issues, not just political issues or health issues in some regions, but just the growth in the Euro zone and in some emerging markets, is that a fair characterization? And secondly I wanted to ask you about your IT and software partnerships, you mentioned Salesforce and you’ve got a couple others.

Is there anything you can say in terms of what the scope of work is with these arrangements, help explain what they are, what type of revenue sharing agreements you might have, what the potential for growth from these might be? Thanks..

With respect to your first question, Europe, I think by all accounts, has just introduced their own version of QE. And so we’re not expecting much growth to come out of big countries in Europe as to distinguish it from the rest of the world.

In other parts of the world, leaving aside wars and illness, I think what we’ve seen is, they’re still growing and god knows we still have plenty of room to gain market share. But they’re not just; they’re not growing at the same pace of growth that we were experiencing in the past.

Your second question, and pardon me for not having been fast enough to write it down, could you repeat it?.

Sure, it’s about the IT and software partnerships that you’ve had, you mentioned Salesforce.com and you’ve done some others. Just, if you could explain a bit more what those are, what is the scope of work, are these like revenue share agreements, what’s the growth profile of these? Just explain a bit more what those are please..

Sure, the partnerships, and there’s an over a 100 of them, are designed to do different things, and I’m sure that our technology partners won access to our systems. And therefore access to our client spending.

From our perspective they offer technology that we are not a technology company but we are a user of technology and we look to partner with to the person at the time or in the period that can help us achieve our goals. Our goals are really to reach the right customer at the right time when they are in the right mood with the correct message.

And all these various partnerships in one fashion or another are to refine our data and to back the information that we require in order to accomplish those things.

And to your other question there aren’t any specific set of revenue sharing or payment streams these are partnerships which benefit both parties in terms of the task and the scope we’re asking each party to perform..

And just add to that a little bit on the sales front Essentially the partnerships with CRM data sharing initiative that’s going to help us and – create more personalized communications to connect the dots between these marketing sales and customers service information, we think that agreement’s going to be a particular use for our CRM agencies, so it’s really about the data sharing.

And on Facebook front, as John said it’s a partnership that’s going to provide our clients ultimately who choose to use – all the benefits of people based marketing.

And being able to target and measure based on people in both online and offline measurement world, so it’s really getting access to the technology and the platform but again it isn’t the deal that has commitments on our side..

Okay thank you..

Our next question today comes from the line of Swinburne with Morgan Stanley. Please go ahead..

Thank you good morning and thanks for the color on programmatic which of course I want to ask more questions on. It is a big topic so can you help us think about from an Omnicom perspective, how incremental programmatic is to your business from your clients.

I guess what I’m struggling speaking about is if a client spends x amount of dollars on media buying through Omnicom traditionally, either on TV or through direct digital platforms and then shift to buy it through your Accuen platform.

Is that generating incremental revenue for you and of it is, is it primarily because the accounting is different, because you’re acting or as principle as you said before programmatic.

And if it is the incremental where’s that money coming from, and obviously client I wouldn’t imagine that clients are spending more money in aggregate because of programmatic but maybe that’s incorrect?.

I would agree, I don’t see more new money coming in to the overall spend I see a shift our objective through all of this is to improve the ROI of the money spent by our clients.

And them achieving their objective of reaching customers and, technology allows you to do that when – we have traditional customers that are trading on trading desk that are embedded in our agencies. And there were just in the marketplace bidding against whoever else is out there.

We also have an opt-in model where we are in a sense taking the risk of achieving objectives that the client laid out in reaching those audiences. One is more of a known to the client, one is since you don’t know who you’re bidding against at any given time.

We don’t quite know what the environment’s going to be, so the accounting is pretty straight forward the accounting is defined by a bunch of people who sit behind GAAP and depending on, I’ve learned years ago simply to accept what they say, not to argue with they say.

So I’m not sure if I’ve answered your question but it is an increasing area, where we can be more effective to the client’s dollars..

Okay I think that makes sense.

In another words the clients want to pay Omnicom more as a percentage of its overall spending, because the buyer is more valuable from an ROI perspective I think that’s what you’re predicting?.

Right and we are agnostic player in the marketplace, and as we move forward in some of our predictions come true, there are going to be couple of players, there’s always going to be Google, there’s always going to be Facebook.

In all likelihood there always be WPP and then us who have the scaling and the source and we are agnostic we’re not attempting to sale inventory that we only mass. We are simply going after audiences but we know our clients’ needs to reach..

That was actually where I wanted to go to, it’s just in relationship with Facebook particularly on Atlas because it would seem overtime you’re competing for economics Atlas, from an Accuen perspective both trying to get a fee on mobile spending for advertisers and may be there’s an analogy with Google on double click that you could point as to how that works, well over time?.

Right now I consider both companies friends and not enemies there isn’t that much conflict between what we are trying to do and what they are trying to do.

We are cognizant every day that could change at some point in the future but right now they are big clients of ours and we are big clients of theirs and we ventured into economically sound deals with both..

Certainly we see them as partners and keep in mind no single media vendors sees the whole landscape quite like we do. And as John had said we are neutral third party, so we see search social display video, across all devices and we try to link the customers across all of them which not everybody can do..

Thanks for the color..

Sure. I think we have time for just one last quick question..

Okay our final question today will come from line of John Janedis from Jefferies..

Thank you. I’ll make this fast. First just going back fulfillment business Phil have seen any change to the margin profile over the past year or so. Has the growth been similar to the rest of Omnicom and then secondly you talked briefly about Russia, there seems to be maybe some change on the table there that’ll impact advertising.

Are you seeing any kind of early signs and further slowing in, can you remind us about its revenue contribution I’m assuming low singles?.

Yeah, in terms of size it’s definitely low singles on the low end of the low singles for Russia, back to your margin point. I think the profile hasn’t really changed we approach each of our agencies, each of our core operations and work with them to try and find margin that’s right for them.

And again we’re focused on the margin dollars not just a percentage that you can’t really feel and touch. And we think great businesses, great returns and we’re happy to have them.

They’ve been performing well on the whole over a period of time that they kind of perform similar to Omnicom overall I think probably little slower rate than we’ve seen in Accuen and the media business lately but we’re happy with their performance..

Thanks.

Just a quickly on Russia, anything in terms it’s just the tender of the business I know you mentioned its slowing a little bit but any sense that slow is more so going forward or not yet?.

Not yet the business has actually been doing well not just for the external environment in Russia the business has been solid, we haven’t seen any signs yet of that other than a slight slowdown and some excellent performance but it’s still performing really well. No reason to think anything is imminent..

Thank you..

Okay. Well thank you everyone for joining the call. And we’ll talk to you again soon..

Ladies and gentlemen, that does conclude our conference for today. We thank you for your participation and using the AT&T Executive Teleconference. You may now disconnect..