Omnicom Buys Flywheel to Extend eCommerce/Retail Media Reach

Marketing communications company Omnicom has acquired eCommerce firm Flywheel Digital for $835 million.

The company says the net-cash purchase, announced Monday (Oct. 30), allows Omnicom to expand its footprint in the digital commerce and retail media sectors.

In a news release, John Wren, Omnicom’s CEO and chairman, said, “eCommerce sales worldwide are set to increase by 50%, reaching about $7 trillion dollars by 2025.” 

“The acquisition of Flywheel significantly broadens our reach and influence in the rapidly expanding digital commerce and retail media sectors, two of the fastest-growing parts of the industry. Together, we will seamlessly integrate our offerings across retail and brand media, digital and in-store commerce and CRM, ultimately delivering superior results for our clients.”

According to the release, Flywheel helps merchants sell their products more efficiently on marketplaces like Walmart, Amazon and Alibaba, offering retail commerce operations, media execution and market intelligence to more than 4500 brands.

In an interview with the Wall Street Journal, Wren said that marketers have digital commerce and retail media in mind when considering agencies. He said Omnicom considered building its own capabilities but saw that Flywheel was already ahead of the curve.

“When I sent my three top technology guys down to take a look at [Flywheel], they basically said, ‘You can’t replicate what they’ve done. It will take you as much money and at least five years,’ and that’s if the world sits still, which the world’s not about to do,” said Wren. 

Recent reporting by PYMNTS has examined a number of different retail media avenues companies are taking.

As noted here over the summer, retail media is expected to reach $45 billion this year, a 20% increase year over year, and is projected to become a roughly $106 billion industry by 2027.

“As retailers introduce more in-store ads, they face challenges related to privacy concerns and negative reactions from shoppers who see these ads as unattractive or distracting,” PYMNTS wrote in August.

This scenario has already played out at Walgreens, which deployed digital smart screen ads on refrigerator doors throughout the U.S. A number of shoppers took to social media, complaining these screens made it tough to browse the frozen food section.

And last week, Instacart unveiled an initiative that will see it provide brands with category-specific buying data, letting them cultivate larger, more purpose-driven audiences that align with the shopping preferences of consumers in Instacart’s Marketplace.

“This partnership enables brands to craft tailored audience segments for specific product categories and ultimately bolster their marketing tactics and forge stronger connections with consumers,” PYMNTS wrote.