If you buy advertising, chances are that at least one firm you're working with is or will be part of the mega network that will arise after the merger of Omnicom Group (NYSE: OMC) and Publicis Groupe (NYSE:PUB.PA) – creating Publicis Omnicom Group, the world’s largest agency network holding company with a market cap over $30B. Even if these two firms are unfamiliar to you, you have likely heard of TBWA\Chiat\Day, Leo Burnett, Saatchi and Saatchi… the list of names under the combined umbrella is long.
Sure, the regulatory agencies here in the US or in Europe could nix the deal, but what if it goes through as proposed? What does it mean for you, the marketing buyer? We’re covering this extensively over on Spend Matters PRO this week, but here are some of the issues and takeaways:
- Buying power increase. The new entity will be the #1 advertising buyer by a wide margin; we’re looking at the opportunities this can provide.
- Talent retention: All mergers lead to reduced head count at both the higher levels of the pyramid as well as in redundant operational functions further down, such as support function roles. Expected reductions there can lead to initial loss of momentum owing to inevitable internal turf wars – possibly even production delays – and could overall have a negative impact on staff morale in the agencies that are impacted.
- Production delays and general sluggishness. Will a larger firm really become quicker to execute, or will it grow more bureaucratic and less nimble?
- Client gains and wins. Competitive conflict need to be identified and resolved.
- Analytics and Digital. If digital is the current and future frontier, then data and insight is the exploration vehicle and life support system for this new world. What will a combined firm bring to help tame the cross-channel performance, competitive, media budgeting, brand/creative performance, activity and collaboration divide outside of just creative talent? What role will advanced analytics and technology play in mastering the digital spend universe?
Procurement organizations - and the marketing category specialists within them - owe it to their companies to develop a perspective on the deal from both an opportunity and risk vantage point. Check back on Spend Matters for continuing coverage throughout the week as we explore the potential combination from the procurement angle in significant detail. In the meantime, if you're looking to come up to speed on tackling marketing spend more successfully, including engaging agencies of record, we encourage PRO subscribers to download our nine-page research brief: How to Attack Marketing Spend.