So, what do local advertising-industry leaders think of the merger of New York-based Omincom and Paris-based Publicis to create the world’s largest advertising holding company?
The new Publicis Omnicom Group had combined revenues of $22.7 billion in 2012. Omnicom CEO John Wren and Publicis CEO Maurice Levy will be co-chief execs.
The move also marries Omnicom’s BBDO Worldwide, TBWA Worldwide and DDB Worldwide with Publicis’ Saatchi & Saatchi and Leo Burnett. The new company will have more than 130,000 employees,
MARKETING asked more than a dozen local agency and media principals for their comments on the merger. Here’s a sample:
Bob Moore, chief creative officer emeritus of Publicis USA and now a creative and marketing consultant, called the merger “a brilliant move for Maurice [Levy]. Without an obvious succession plan within the Publicis Groupe, he’s found a way to go out on top of the industry. What started 90 years ago as a small creative shop in Paris is now the biggest holding company the world has ever seen. Is that a win? Oui!”
Jim Copacino, principal of Copacino+ Fujikado said, “While Levy and Wren were carving up the world, we were busy telling great stories, inventing new stuff and doing good work for a dozen smart, appreciative clients. I’m dumb enough to think that we are the lucky ones.”
Bill Fritsch, new CEO at Digital Kitchen, struck a similar chord. “This merger is good for two reasons,” Bill said. “First, it will shake loose a ton of clients for the new generation of nimble, privately held agencies. And secondly, both agencies will be consumer in a culture war that will take their eyes off the ball…smart work for clients. This will spur a second wave of client defections. Thanks Omnicom! Cheers Publicis!”
Dave Remer of remerinc called the move “nothing more than the advertising oligopoly applying more pressure on Google. Like a dark star, this planet’s de facto search brand is swallowing ad dollars at a pace that threatens traditional campaign budgets. These guys want their leverage back. This kind of scale will attract the worst kind of clients.”
Mike Doherty, president of Cole & Weber United, said, “as part of a multi-national holding company, I’ll take a contrarian view. These are smart people. The didn’t get where they were by making short-sighted decisions. They get that today, business is either local or global. The middle is shrinking. And the role of the holding company is changing. Now, global clients often work directly with a holding company to identify the best resources to align with. This adds options to their bench…”
Alan Brown of DNA took a similar tack. “I think the merger is huge news—and a big deal for our industry. The business has been changing dramatically… digital agencies are becoming AOR’s and we’re competing with Google at the same time we’re buying from them. The way I see it, the merger is about being able to compete with big data and analytics…”
Gary Meyers, principal of Hodgson Meyers, said, “I believe our own destiny is influenced significantly more by our ability to quickly adopt new technologies, push strong creative through those technologies and continue to win good, smart, appreciative clients.”
Teri Bauer of Merlino Media said she believes the merger is “purely about shareholders and has absolutely nothing to do with the Omincom-Publicis product. Bigger isn’t better, even when it comes to WPP and Omincom-Publicis’ wiener-wagging war. Does anyone care what their clients think? That’s what we should be asking.”
Spyro Kourtis, president/CEO of HackerGroup, had lots to say. “This is a merger of holding companies, not agencies. At least, not yet. So discussions about “nimbleness” and “big ideas” are a little premature. Holding companies don’t come up with the creative work. (And, in any case, I’m not completely convinced that big agencies are less creative than small ones.) However, I do see advantages to the smaller agencies in this vast new network. They’ll get access to technologies—particularly on the media side of the business—that only big agencies could normally afford. That could mean it will be harder for independent agencies to compete.
“Additionally, I think it’s exciting that Publicis Omnicom has decided to go after the real competition—digital media. They’re focused on technology and date solutions. It’s a bold move and I admire that. I can see how small agencies will continue to thrive and I can see how other holding companies will compete. I’m having trouble seeing how medium to large independent agencies will be able to go up against the technology advantage Publicis Omnicom will bring to their agencies. I see the new POG being extraordinarily creative in an area most creative agencies ignore—data. Bless them.”
Ted Leonhardt, now an independent design and business consultant, said, “Sounds like two old guys guaranteeing themselves high-paying jobs while Rome burns and the specialists gain share. Lots of opportunity for folks who really know how to ask people. Thanks for asking.”
Rick Stanton, principal of Stanton & Everybody said, “My take on this is the same take I have on all mega-international-conglomerate shops. This is just a fatter mega-international-conglomerate pig. It’s a win for the shareholders and the two old guys who brokered the deal, but no for advertising. And you can rest assured a lot of good people are going to lose their jobs because the efficiency goons are about to show up…I wonder how Coke and Pepsi, Apple and Samsung or Verizon and T-Mobile feel about this. Maybe you should ask them, too.”
Dan Japhet, principal of Strategic Media Alignment, asked, “OK, what do you do when growth is past history but shareholders still want stock-price improvement (most of the stockholders are in the agencies)? Well, you consolidate and reduce costs. It isn’t rocket science.”
Kathy Neukirchen, principal of Media Plus+ said, “Advertising or media communications or strategic planning… or whatever we’re all calling ourselves these days is a business, and business is about making money. And it’s fine to make money for shareholders if they own the business. This will work for some clients and for those it doesn’t work for, it just might mean new business for all of us who aren’t shareholder owned. It is what it is.”
Mike Mogelgaard, retired local advertising guru, answered with three points: 1. Assimilating those diverse international cultures (i.e., egos) is a huge stretch; 2. The “enhanced buying power” of traditional media is being marginalized every day by social media; and 3. At the end of the day, it all comes down to a couple of clever guys over a desk. A behemoth isn’t conducive to that.”
Tracy Wong, principal of WDCW, summed up the merger in a very few words, “Two fat, bloated rich guys fart in a forest. Does it make a sound to anyone else?”