Revenue

9 Months Ended

Sep. 30, 2019

Nature of our services

We provide an extensive range of advertising, marketing and corporate communications services through various client-centric networks that are organized to meet specific client objectives. Our branded networks and agencies operate in all major markets and provide services in the following fundamental disciplines: advertising, customer relationship management, or CRM, which includes CRM Consumer Experience and CRM Execution & Support, public relations and healthcare. Advertising includes creative services, as well as strategic media planning and buying and data analytics services. CRM Consumer Experience includes Omnicom’s Precision Marketing Group and digital/direct agencies, as well as our branding, shopper marketing and experiential marketing agencies, and CRM Execution & Support includes field marketing, sales support, merchandising and point of sale, as well as other specialized marketing and custom communications services. Public relations services include corporate communications, crisis management, public affairs and media and media relations services. Healthcare includes advertising and media services to global healthcare clients. At the core of all our services is the ability to create or develop a client’s marketing or corporate communications message into content that can be delivered to a target audience across different communications mediums. Our client-centric business model requires that multiple agencies within Omnicom collaborate in formal and informal virtual client networks utilizing our key client matrix organization structure. This collaboration allows us to cut across our internal organizational structures to execute our clients’ marketing requirements in a consistent and comprehensive manner. In addition to collaborating through our client service models, our agencies and networks collaborate across internally developed technology platforms. Annalect, our proprietary data and analytics platform, serves as the strategic resource for all of our agencies and networks to share when developing client service strategies across our virtual networks. Omni, our people-based precision marketing and insights platform, identifies and defines personalized consumer experiences at scale across creative, media and CRM, as well as other disciplines.

Revenue by discipline was (in millions):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Advertising	$	2,027.2	$	1,992.1	$	6,042.4	$	5,961.0
CRM Consumer Experience	636.4		639.3		1,905.2		1,938.9
CRM Execution & Support	337.4		464.0		1,009.6		1,466.6
Public Relations	337.2		356.0		1,020.6		1,065.0
Healthcare	285.6		262.9		834.7		772.0
	$	3,623.8	$	3,714.3	$	10,812.5	$	11,203.5

Economic factors affecting our revenue

Global economic conditions have a direct impact on our revenue. Adverse economic conditions pose a risk that our clients may reduce, postpone or cancel spending for our services, which would impact our revenue.

Revenue in our principal geographic markets was (in millions):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Americas:
North America	$	2,096.5	$	2,095.5	$	6,204.1	$	6,178.6
Latin America	100.2		102.0		286.0		325.6
EMEA:
Europe	948.6		1,015.2		2,930.0		3,227.9
Middle East and Africa	59.6		63.7		199.6		207.2
Asia-Pacific	418.9		437.9		1,192.8		1,264.2
	$	3,623.8	$	3,714.3	$	10,812.5	$	11,203.5

The Americas comprises North America, which includes the United States, Canada and Puerto Rico, and Latin America, which includes South America and Mexico. EMEA comprises Europe, the Middle East and Africa. Asia-Pacific comprises Australia, China, India, Japan, Korea, New Zealand, Singapore and other Asian countries. Revenue in the United States for the three and nine months ended September 30, 2019 was $1,993.5 million and $5,882.9 million, respectively, and for the three and nine months ended September 30, 2018 was $1,992.7 million and $5,864.6 million, respectively.

Contract assets and liabilities

Work in process includes contract assets, unbilled fees and costs, and media and production costs. Contract liabilities primarily consist of customer advances. Work in process and contract liabilities were (in millions):



	September 30, 2019		December 31, 2018		September 30, 2018
Work in process:
Contract assets and unbilled fees and costs	$	837.9	$	540.1	$	710.9
Media and production costs	590.0		621.4		648.3
	$	1,427.9	$	1,161.5	$	1,359.2
Contract liabilities:
Customer advances	$	1,059.2	$	1,159.0	$	1,142.5

Work in process represents accrued costs incurred on behalf of customers, including media and production costs, and fees and other third-party costs that have not yet been billed. Media and production costs are billed during the production process in accordance with the terms of the client contract. Contract assets, which primarily include incentive fees, are not material and will be billed to clients in accordance with the terms of the client contract. Substantially all unbilled fees and costs will be billed within the next 30 days. The contract liability primarily represents advance billings to customers in accordance with the terms of the client contracts, primarily for the reimbursement of third-party costs that are generally incurred in the near term. There were no impairment losses to the contract assets recorded in 2019.