Analyst Sees Ad Agencies Weathering DOJ Investigation

Omnicom acknowledges subpoenas
Author:
Publish date:
Social count:
0

Analyst Brian Wieser says he sees limited impact from a reported Department of Justice investigation into possible video production bid rigging by ad agencies.

On Friday, Omnicom Group acknowledged the investigation.

"On Dec. 14, 2016, two subsidiaries within Omnicom Group Inc. received subpoenas from the U.S. Department of Justice Antitrust Division concerning its ongoing investigation of video production and post-production practices in the advertising industry," it said. "Omnicom's outside legal counsel has contacted representatives of the Antitrust Division and the company is fully cooperating with the investigation."

In a note to investors, Wieser said that WPP had indicated three of its subsidiaries have been subpoenaed in the investigation.

Wieser is senior advertising research analyst for Pivotal Research Group.

Saying investors had been asking for guidance, Weiser's was that the scrutinized practices were "relatively contained," though he put that under the heading of "best guess."

But contained means that he does not see it doing significant harm to any significant sized agency, not that there might not be fines and settlements depending on what the investigation uncovers.

He also said that the negative consequences could be mitigated if some of the clients already knew about it and had turned a "blind eye" to the practices.

Related