Dive Brief:

• Omnicom and Dentsu, two of the world's largest ad holding groups, announced Thursday they are winding down business in Russia in response to the Ukraine war.
• Omnicom is working with local partners to "dispose" of investment positions in the country while finalizing a plan to ensure continuity for its 2,000 Russian employees. Dentsu operates a joint venture in Russia with a local firm called OKS Group, per a spokesperson. It is now in the process of negotiating a transfer of ownership over the program to that partner. The joint venture has about 1,500 employees.
• Dentsu said it will donate an additional 100 million yen (approx $840,000) to Ukrainian relief efforts, building off a prior gift of around 38 million yen to the Ukrainian Red Cross Society. With these moves, agency work in Russia has functionally dried up, creating an uncertain future for advertising in the region.

Dive Insight:

With Omnicom and Dentsu winding down operations in Russia, none of the major global agency networks remain in the region. Many groups had been planning for a potential withdrawal since Russia invaded Ukraine late last month, but the situation still marks a watershed moment for the industry that carries implications for years to come.

Like others in the category, both Omnicom and Dentsu are relying on local partners to provide a sense of stability for Russian talent and to facilitate a transfer of ownership. Omnicom said it has been striving to preserve an orderly process for both clients and colleagues, a potentially steep challenge as conflict escalates.

Both groups also affirmed that they are prioritizing providing assistance to staff in Ukraine. Dentsu previously suspended work there, where it has about 500 employees working through an affiliate program with a local partner. Omnicom has about 200 people in Ukraine.

WPP was the first ad holding group to halt work in Russia, doing so barely a week after the invasion. Other agencies spent longer strategizing around how to respond to the crisis but have arrived at the same course of action. Interpublic Group and Publicis pulled out of Russia earlier this week. Stagwell Group, Accenture, Havas and S4 Capital are among the other marketing services firms that have reassessed their work and investments in Russia.

Professional services providers and consumer brands alike face tough choices in cutting ties with Russia. While U.S. consumers have signaled they largely support sanctions and the removal of business in the territory, companies have struggled with how not to appear as if they're abandoning local employees. Omnicom, which is still ironing out a continuity plan, noted that many colleagues in the country have been with the agency for decades — a sentiment that's been echoed by many peers.