Omnicom has made a significant entry into the ecommerce marketplace services sector by purchasing Flywheel Digital for $835 million.
Established in 2014, Flywheel Digital was among the pioneers in the now-saturated Amazon advertising agency niche. In 2018, Ascential, a British consultancy and B2B media enterprise, acquired it for an estimated $60 million, which included up to $400 million in earn-outs spanning three years.
The acquisition means that Omnicom will integrate roughly 2,000 Flywheel staff, including its founding members. Among them is the current CEO of Ascential, Duncan Painter, who will take the helm of Omnicom’s ecommerce and retail media division.
Flywheel, equipped with a range of tools designed to support big brands in their ecommerce strategies, was once a direct rival of Omnicom. The two companies even had numerous shared clients, shared Omnicom’s CTO and EVP, Paolo Yuvienco.
However, what Flywheel offers diverges from the conventional agency frameworks. A notable aspect of its services includes handling product pages, storage, inventory logistics, and product pricing across various platforms.
Initially, these requirements were exclusive to Amazon, Yuvienco pointed out. This led to the emergence of Amazon-centric agencies like Flywheel, Marketplace Ignition (acquired by WPP), and The Ortega Group (currently under Tinuiti).
But the landscape has evolved. Now, there are entities like Walmart Connect, Target’s Roundel, Kroger, Albertson’s, and several other major retailers launching expansive retail media networks. These networks echo Amazon’s dynamics, meaning agencies must bolster their internal ecommerce marketplace expertise to remain competitive.
One significant advantage with Flywheel, according to Yuvienco, is the vast amount of data it brings. This data volume rivals that of Omni, Omnicom’s metadata center that discerns trends and analyzes how diverse media and audiences fare. While Omni doesn’t track individual data, it evaluates metadata to extract insights from its collective media purchasing information.
Although Flywheel doesn’t possess individual payment details like Amazon for closed-loop attribution, it holds comprehensive, anonymized data on product sales. Flywheel’s insights into product presentation and online purchase locations enrich Omnicom’s demographic and behavioral data.
Concluding, Yuvienco emphasized, “Our ultimate goal is to amplify sales for our clients. That’s our core purpose.”