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What Should We Mere Mortals Make of the Publicis-Omnicom Merger?

There's a Message for Smaller Agencies That Want to Stay Competitive

By Published on . 5

The next time I'm flying coach and find myself in the middle seat between John Wren and Maurice Levy, I plan to talk to them about the effect that the seismic merger between Omnicom and Publicis, their respective megafirms, will have on ad agencies with a couple of hundred, or even a dozen, employees. In the meantime, I'll share my observations with you.

Because both entities are global corporations, and because their leaders possess testosterone and healthy egos, I assume that behind all the strategic explanations is the drive to become bigger, grab market share, increase leverage with suppliers and make more money. Plus, someone from the advertising industry needs to challenge Facebook and Google. For this we should all applaud them. But the political machinations and policy discussions in the boardrooms of these two agencies, and their largest clients, probably won't trickle down to my world for some time.

I'm not expecting Coca-Cola or McDonald's to call me anytime soon because they want a smaller agency with a more personal touch. But I do think that this merger tells us something about the direction of the industry.

It points to one of the more interesting contradictions in the advertising world. Clients want agile agencies with an entrepreneurial spirit that can move fast and respond to change in real time. Small agencies have been selling this point hard for years.

On the other hand, large brands also want global agencies that can reach every corner of the world, harness the power of new digital technologies, create every imaginable form of content, ride the wave of mobile advertising and tame the black box of media-buying algorithms. Advantage goes to the holding companies with a constellation of advertising, PR, digital, technology and media properties.

Even with the respective clout that both Publicis and Omnicom have today, they believe they still need more of everything to compete. That should be the clue for the rest of us, regardless of agency size. To be effective, we all need to make peace with that contradiction between agility and global scale. While it's an almost Herculean task, competitive agencies will need to master a broader and more complicated spectrum of agency services than ever before, including strategy, content creation and distribution, analytics, digital advertising across every new and existing platform, evolving marketing technologies and a sophisticated knowledge of media buying.

This doesn't guarantee global dominance, or even agency-of-record status. It does guarantee relevance, because even the smallest accounts need an agency that can put together a marketing strategy with hundreds if not thousands of moving pieces. In the meantime, we can all watch the Publicis Omnicom Group to see if they do it right.

ABOUT THE AUTHOR
Phil Johnson is CEO of PJA Advertising & Marketing with offices in Cambridge and San Francisco. Follow Phil on Twitter: @philjohnson.
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