Martin Sorrell: Publicis-Omnicom Merger an 'Arms Race' Between French and Americans

WPP Chief on Holding-Company Rival, Acquisition Strategy and Unilever Cuts

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WPP chief Martin Sorrell is continuing to take shots at the merger of rival agency companies Publicis Groupe and Omnicom Group, knocking its planned management structure and its effect on their clients and employees at a conference Monday.

Martin Sorrell
Martin Sorrell

"Structurally, it's clunky," Mr. Sorrell said at the annual UBS Global Media and Communications Conference in New York on Monday. He would like to know whether the biggest merger in adland history will result in an "American takeover" or a "French takeover", he said, equating the situation to an arms race between the Americans at Omnicom and the French at Publicis.

Under the merger plan announced in late July, Publicis CEO Maurice Levy and Omnicom CEO John Wren will serve as co-CEOs for the first two and a half years of the merged company's existence. After that, Mr. Levy will become non-executive chairman and Mr. Wren will continue as CEO.

"It's messy and it gives us a lot of opportunity," Mr. Sorrell said on Monday, citing the potential to win over clients and senior talent. There has been no articulation of benefits for employees or clients of Publicis and Omnicom, he argued.

Mr. Sorrell has criticized his merging rivals before, asking "Where's the beef?" in August and questioning the promised benefits of combining consumer data across Publicis and Omnicom. The formation of the new entity will knock Mr. Sorrell's WPP from its perch as the world's largest communications group.

Mr. Sorrell said WPP's outlook for 2014 looked better than 2013, which he said had produced organic growth north of 3% to date, with the caveat that clients are still "exceptionally cautious."

On WPP's own mergers-and-acquisitions front, Mr. Sorrell said much of WPP's recent acquisitions have been smaller ones, such as Monday's acquisition of digital agency Crystal Semantics by WPP's 24/7 Media, a marketing-tech division. WPP last week announced the merger between 24/7 Media and Xaxis, a move to act as middleman between publishers and advertisers as they increasingly move budgets to "programmatic" advertising.

Overall the company will continue to focus acquisition efforts on new markets and new media, along with a continued focus on developing countries like Brazil, Russia, India and China, according to Mr. Sorrell.

The WPP CEO also addressed the cuts at Unilever, WPP's largest client after Ford. Unilver company last week said that it would cut 800 marketing jobs, but Mr. Sorrell shrugged the move off, noting that the trend was nothing particularly new as marketers strive for more efficiency. "Welcome to the club," he said.

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