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FOIA CONFIDENTIAL TREATMENT REQUESTED BY OMNICOM GROUP INC.

Omnicom Group Inc.

437 Madison Avenue

New York, New York 10022

Attention: Mr. Philip J. Angelastro, Executive Vice President and Chief Financial Officer

(212) 415-3098

October 19, 2018

VIA EDGAR

Ms. Patricia Armelin

Division of Corporation Finance

Securities and Exchange Commission

100 F Street, NE

Washington, D.C. 20549

RE:    Omnicom Group Inc.

Form 10-K for the Year Ended December 31, 2017

Filed February 15, 2018

Form 10-Q for the Quarter Ended June 30, 2018

Filed July 17, 2018

File No. 001-10551

Dear Ms. Armelin:

This letter responds to the request for certain supplemental information by the Staff of the Division of Corporation Finance (the “Staff”) of the Securities and Exchange Commission received by telephone on September 11, 2018 and October 16, 2018 (the “Request”) relating to the Staff’s letter dated July 23, 2018 and Omnicom Group Inc.’s corresponding response letter to the Staff, dated August 16, 2018. All references to “Omnicom,” the “Company,” “we,” “us” and “our” refer to Omnicom Group Inc.

In response to the Request, we are providing to the Staff the supplemental information attached hereto as Attachment 1.

Pursuant to 17 C.F.R. §200.83, confidential treatment of the redacted portions of the supplemental information in Attachment 1 is requested by a separate letter to you of the date herewith. The confidential information is marked with bracketed asterisks (“[***]”).

Please do not hesitate to contact me if you have any questions or require additional information.

Sincerely,

/s/ Philip J. Angelastro

Philip J. Angelastro

Executive Vice President and Chief Financial Officer

cc:

Michael J. O’Brien, Senior Vice President, General Counsel and Secretary, Omnicom Group Inc.

Rory T. Hood, Esq., Jones Day

Timothy M. Daly, KPMG

OMNI 001

FOIA CONFIDENTIAL TREATMENT REQUESTED BY OMNICOM GROUP INC.

Attachment 1

Background

We believe this Attachment is responsive to the questions that we discussed on our call on September 11, 2018. We have included information regarding the nature of our creative advertising and strategic media planning and buying businesses and the services we provide. We have provided additional details regarding the nature of our client contracts and the identification of the associated performance obligations, and we have specifically addressed our application of ASC 606 and the Five Step Model. We have also provided additional clarification of the application of our revenue recognition procedures as they apply to certain commission- based client arrangements, as well as addressed our consideration of whether we act as an agent or as a principal based on the control indicators of ASC 606.

Application of ASC 606 - Executive Summary

The following summary of the application of the ASC 606 five step revenue recognition framework to our creative advertising and strategic media planning and buying services businesses. This summary is being provided to assist the Staff in understanding our business and our application of ASC 606 and it is meant to serve as the basis for a future discussion with the Staff regarding our application of ASC 606. The following is a summary of the key points:

We provide Professional Marketing and Corporate Communications Advisory and Consulting Services across a comprehensive range of marketing and communication disciplines, including Creative Advertising and Strategic Media Planning and Buying services. At the core of our service is our promise to deliver an integrated agreed-upon level of effort at an agreed-upon price to address our client’s marketing needs. Our client arrangements require that we provide the agreed-upon level of effort by staff function needed to perform the requested services on a discrete project basis. The promised level of effort is documented in a Statement of Work (SOW). The fee included in the SOW is formalized with a staffing plan as our agencies are compensated for their time and effort on a rate per hour basis.

Like many professional service firms, we work for our clients on essentially an at-will basis. The project underlying our client contracts are either short-term engagements (90 days or less) or long-term engagements (up to one year). Generally, our client contracts are cancelable by either party on short notice for any reason. In the event of cancellation, we are entitled to payment for our services performed to date without regard to any specific tangible output. Our engagements are highly collaborative with the client and the client is well informed of progress to date. As a result, our services are consumed by the client throughout the contractual period. Further, the intellectual property we produce is owned by the client and has no alternative use to us. Accordingly, the preponderance of our professional services revenue is recognized over time measured by labor hours.

While the items above summarize the key points of the presentation, we have also addressed several other items in the materials that follow, including previously discussed matters in our response to the Staff’s comment letters, regarding our consideration of the application of the five step revenue recognition framework of ASC 606 and we welcome the opportunity to discuss this presentation with the Staff.

OMNI 002

FOIA CONFIDENTIAL TREATMENT REQUESTED BY OMNICOM GROUP INC.

1.

 “What We Do” - Professional Marketing and Communications Services

We provide Professional Marketing and Corporate Communications Advisory and Consulting Services, including Creative Advertising Services and Strategic Media Planning and Buying Services, across all marketing disciplines.

Creative Advertising Services

Creative Advertising Services consist of the following functions: Strategy and Planning; Creative Leadership; Account Management Services; Digital and Social Services; Production Coordination Services; and Administrative Services. [***].

Strategic Media Planning and Buying Services

Strategic Media Planning and Buying Services consist of the following functions: Media Communications Strategy; Media Communications Planning; Continual Optimization of the Media Strategy and Planning Cycle; Analytics and Reporting; Media Buying Coordination Services; Account Management Services; and Administrative Services. [***].

2.

 Linking “What We Do” to the Client Arrangements and Addressing the Accounting Literature and our Accounting Policy - Application of the Five Step Model

Step 1 - Identify the Contract

A.

 A contract is an agreement that creates enforceable rights and obligations (ASC 606-10- 25-20).

The Master Services Agreement (MSA) is a customized agreement setting forth the terms and conditions under which the client may engage Omnicom for professional services. The contracting entity in the vast majority of cases is the Lead Agency, or Agency Network and not Omnicom.

The Statement of Work (SOW) identifies the promised services to be transferred to the client, (Creative Advertising Services, or Strategic Media Planning and Buying Services in the examples previously provided to the Staff) and the specific fees, terms and conditions for the promised services.

•

 The MSA and SOW together represent the client contract and establish the enforceable rights and obligations of the parties.

•

 Fees and the related level of Agency effort are included in the SOW as an appendix to the MSA.

•

 The MSA and SOW are cancelable by either party on 90 days’ notice without penalty and all MSAs provide that the Agency is entitled to all fees for services performed through the cancellation date. The MSA and SOW do not contain cancellation penalties and terminations for convenience, though infrequent, can and do occur.

•

 An SOW can be for short-term projects (90 days or less) or long-term assignments (up to one year).

•

 Every SOW is separately negotiated with the client by the performing Agency and our Agencies execute and perform tens of thousands of SOWs per year.

•

 A staffing plan, which is included in the SOW, translates the SOW into the agreed-upon level of effort by staff function needed to perform the requested services. As with other professional services firms, both the Agency and the client monitor the amount of time incurred against the staffing plan.

•

 The Agency’s rate card is then applied to the forecasted aggregate hours by function from the staffing plan to arrive at the resulting fee.

•

 Some client arrangements include performance incentives that can be both qualitative and quantitative.

•

 In certain markets and on an infrequent basis, commission structures are used in client arrangements.

B.

 Optional Services

Often services not contemplated in the original SOW are added at a later date. All optional services are a separate purchasing decision by the client.

•

 A new and distinct SOW is prepared for the new services under the terms and conditions of the MSA and the additional services are priced at the standalone selling price (see Items E and F below).

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FOIA CONFIDENTIAL TREATMENT REQUESTED BY OMNICOM GROUP INC.

•

 Optional purchases are therefore treated as a separate contract and not a contract modification for accounting purposes (discussed in item F below).

C.

 Multi Agency Engagements

Clients often require services from more than one of our Agencies. In most cases, the services provided by each of our Agencies would be subject to the same MSA and a separate SOW is negotiated with the client by each performing Agency. [***].

D.

 Multi Discipline Engagements

In a few businesses and markets, one Agency may perform several services (e.g.; creative and media). In such instances the SOW will include both services and a combined fee. However, the staffing plans included in the SOW will specifically identify the service disciplines involved; the result is effectively the same as having a separate SOW and fees for each service discipline; that is, each service is priced at its standalone selling price. In this case, the scope for each service discipline is based on the respective staffing plan. The scope for each service discipline is treated as a separate performance obligation and fees are allocated to each performance obligation based on the relative proportion of hours in each respective staffing plan (ASC 606-10-32 through 35).

E.

 Combining Contracts - ASC 606-10-25-9

Two or more contracts entered into at or near the same time with the same customer shall be combined if one or more of the following criteria are met:

•

 The contracts are negotiated as a package with a single commercial objective.

•

 The consideration to be paid on one contract depends on the price or performance of the other contract.

•

 The goods or services promised in the contracts are a single performance obligation (ASC-606-10-14 through 22).

In our multi-agency engagements, more than one Agency will provide services to the client.  In most cases, each Agency will negotiate a separate SOW with the client. We concluded that we do not meet the criteria to combine the SOW of each Agency into a single contract because:

•

 Each Agency negotiates a separate SOW for its services and the SOW is not negotiated as part of a package with another Agency.

•

 The consideration paid to each Agency is separate and distinct and there are no pricing or performance interdependencies with any other Agency SOW.

•

 The goods and services promised by each Agency are separate performance obligations. In a multi-agency arrangement, each Agency has its own functional discipline that is different from the other performing Agency.

F.

 Contract Modifications - ASC 606-10-25-10 through 13

A contract modification is a change in the scope or price, or both in a contract. Contract modifications are treated as either a separate stand-alone contract or are combined with the original contract. A contract modification is accounted for as a separate contract if both the following conditions are met:

•

 The scope of the contract increases because of additional goods and services that are distinct.

•

 The price of the contract increases by an amount that reflects the stand-alone selling prices of the additional goods and services.

In circumstances where the client adds additional scope or new services reflecting services not contemplated in the original SOW, the Agency will execute a new SOW with the client. We concluded that in these instances, the new SOW is accounted for as a separate contract.

A contract modification that is not accounted for as a separate contract is accounted for as a change to the original contract. Infrequently, significant variations in the level of effort in a fixed fee contract may result in an adjustment, upward or downward, to the fee. In these cases, we concluded that these changes are a modification of the existing SOW. We account for this modification by updating the transaction price and recording a cumulative catch-up adjustment to revenue in accordance with ASC 606-10-25-13b.

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Step 2 - Identify the Performance Obligations

A.

 The performance obligations are the promised goods and services in the contract that will be transferred to the client (ASC 606-10-25-16).

•

 The SOW is the agreed-upon level of effort expressed in FTEs and staff classification for the engagement. The promise to the client is the level of effort to provide and integrate the advisory and consulting services.

B.

 For Creative Advertising Services, the integration of the collective effort of the FTEs results in the execution of creative ideas that extend across the client’s marketing organization, brands and products including, incidental production efforts and output that are not distinct in the context of the contract (ASC 606-10-25-21).

•

 The core of a creative assignment is to provide the client with a strategic marketing plan and creative idea that can be used throughout the client’s marketing and sales organization and across all types of media. Our engagements are highly collaborative with the client and the client is kept well-informed of progress-to-date. Therefore, the client is receiving and consuming our services as the SOW is completed. All output produced requires the integration of the Agency’s collective effort (i.e.; the marketing strategy and creative idea).

•

 The SOW is a promise to provide advisory and consulting services at an agreed-upon level of effort by Agency personnel at an agreed-upon rate per hour to accomplish the entire assignment. [***].

•

 The Agency may or may not be asked to provide advisory and consulting services related to the production of the commercial spots which is performed by third-party production companies. The MSA provides that the Agency will be compensated for the level of effort expended to date in the event of cancellation by the client, [***].

C.

 Other Considerations - Creative Services

•

 The client is involved throughout the creative process.

•

 [***].

•

 The client may request Optional Services. Often production coordination services are an Optional Service that may or may not involve the Agency. Agency involvement in Optional Services results in a separate SOW (i.e., a separate contract), including out-of-pocket costs and pass-through costs. Pass-through costs are third-party vendor costs that are pre-approved by the client, coordinated by the Agency, and are required to be billed to the client without mark-up.

•

 The client typically hires the services of a third-party cost consultant to oversee Agency and other third-party vendors (production companies, talent vendors, research companies, etc.).

D.

 For Strategic Media Planning and Buying Services, the incorporation of the collective level of effort of the FTEs results in a comprehensive media plan and th