In a continution of FindGood's effort to see what smaller marketing agencies are saying about the Publicis/Omnicom merger, we asked MD of marketing agency Incite, Kristian Gough what he thought about the upcoming move and how he saw it affecting the industry.
The Publicis Omnicom Group will boast a forecasted £23 billion in share value and 40% of the global advertising market if regulators approve it. Big deal.
However, the risks of the large merger are easily translated into advantages for independent advertising and marketing agencies. For example, the complicated process of orchestrating a merger can be a cause for concern for clients who will be anxious to avoid any negligence of their brand’s needs during the process. Incite found new business potential in the following problems:
Problem #1 – Bigger is not better
The new merger brings together the force of Publicis brands such as Saatchi & Saatchi and Leo Burnett with Omnicom's BBDO Worldwide and DDB Worldwide in a 130,000 strong workforce. It is yet to be seen if the giant, slow moving merger of Publicis Omnicom will manage to guard its large client base while it’s still finding its feet. No doubt their eyes will be on the smaller, faster independent agencies that have a chance to poach some of their clients from their grasp.
Solution #1 – Smaller is agile
Instead of mourning the loss of a market majority and surrendering to the new giant, it is rumoured that independent marketing agencies are planning their poaching methods for the clients that will be unwittingly dragged through a grand scale merger. The focus for independent agencies should now be on nurturing those potential leads and proving their agility above the larger agencies.
Problem #2 – Risky business
Representing a competitor brand is risky and unsettling for clients, especially when the word ‘data’ is mentioned. Omnicom and Publicis represent competitor clients, the most significant of which are long-term rivals Coca-Cola (Publicis) and Pepsi (Omnicom). In an article in Advertising & Media Week Omnicom’s John Wren and Publicis boss Maurice Levy were quoted mentioning the possibilities and benefits of sharing data to advance the entire Group.
Solution #2 - Independent is data safe
Now this would ordinarily be an unheard of practice as data shared between competitive clients is only going to benefit the agency if that agency held both competitor contacts, which the Omnicom and Publicis Group now will. The losers in the data share will be the rival clients whose aims are to retain this information as confidential and avoid competitors from learning their market value. This is an opportunity for independent agencies to promote themselves as a secure external body.
Problem #3 – Media Saturation
The merger will generate ‘anti-trust’ issues that are being looked into by external audits but the two agencies are confident that they will be resolvable. One main antitrust concern will be for the media planning and buying of TV and print advertising that stretches between 45 countries. A majority buying force will be an unfair advantage unless the merger uses strict ‘firewall’ procedures to maintain equality for competitor agencies and even for their own separate clients.
Solution #3 – First Choice
On the other side, independent agencies will be able to function without strict internal audits to ensure overlap is not happening. They will also be free to buy and plan advertising without being confronted with saturation issues.
Problem #4 – More mergers
Conversation has also turned to the third giant in the advertising agency landscape, WPP perhaps the wolf in sheep’s clothing in this case. Many shareholders are questioning their position in the changing advertising agency landscape. The merger is predicted to cause a transferral of shares across advertising agencies from WPP who are now under threat of being dwarfed by the new super giant. In retaliation CEO of WPP Martin Sorrell has hinted at the idea this will not be the end for large-scale mergers but in fact just the start. So we can guess what Sorrell is planning for WPP.
Solution #4 – More focus on clients
Agencies such as WPP may choose to focus their attention and efforts on mergers. Whilst other, larger agencies battle out over agency mergers, smart independent agencies can spend time focusing on acquiring the clients they have wanted to seek new business from.
We like the way Havas put it
David Jones, the chief executive of Havas gave the first competitor statement summing up all these valid points. Jones referred to the deal as “an industrial merger in the digital age” and continued to say:
“I’m not sure this is in the best interests of their clients or their talent. Clients today want us to be faster, more agile, more nimble and more entrepreneurial, not bigger and more bureaucratic and more complex.
“It’s a massively interesting and surprising move. The industry’s obsession with mergers and acquisitions still amazes me, particularly in a world where digital and technology have made scale irrelevant.”
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