According to numerous media reports two of the largest advertising companies in the world, the Omnicom Group and the Publicis Groupe, are expected to announce their merger on Sunday. The expected merger will create a new advertising industry leader. The prevailing sentiment on Madison Avenue is that the newly merged company, expected to be called Publicis Omnicom Groupe, will be positioned to better capture profits from digital media and emerging markets. The combination of Paris based Publicis and New York based Omnicom, would be larger than the industry leader WPP.
My initial take is that you have two whales who have been swimming against the tide in a large ocean with rapidly changing currents decided to band together and swim against the tide in a large ocean with rapidly changing currents. Obviously, this new behemoth will be able to extract concessions from digital suppliers. However, they will have to deal with some very large conflicts amongst the brands they currently serve. You can’t have the same agency serving Pepsi and Coca- Cola, the Republicans and the Democrats or the Hatfields and the McCoys without the clients questioning their loyalty to you. How the agencies would handle potential conflicts is expected to be addressed by the companies on Sunday.
In an interview with The New York Times this month, Publicis’s longtime chief, Maurice Lévy, said he expected much of the growth in the advertising sector to come from emerging markets and mobile and digital advertising. Both companies have aggressively expanded in markets such as China and Brazil over the past few years, helping offset weakness in Europe, but combined they likely would now dominate in some of those markets.
But we have to question whether in the long term, these behemoth entities can match the nimbly timed, one-to-one, personalized experiences the new digital marketing landscape competition provides. For me and the small business markets I serve, I am not worried about this merger. I am more concerned about understanding and surfing the present and future tides than swimming against the currents.