Adland Response to Publicis-Omnicom Merger: Cautious Skepticism
Marketing clients of Publicis and Omnicom have been slow to react to news of the merger of the two holding companies. Many seem to be taking a wait-and-see approach.
But others, including Ad Age readers, weren't so slow to respond. And many were skeptical of the notion that the deal had anything to do with big data and competing against the likes of Facebook and Google.
Said Ad Age reader Patrick Di Chiro, "The main rationale given for the merger -- the need to compete with the tech/media giants Google and Facebook -- is a complete red herring."
Simulmedia CEO Dave Morgan made much the same point to AllThingsD's Peter Kafka: "I think it's a total misdirection to think that you can leverage the scale and advantages of big data if you're bigger. Quite the opposite. These aren't technology companies, and you don't get better tech development out of consolidation. You're not going to create the next MediaMath, or Videology, or Facebook, or Google out of this."
In terms of massive size yielding more buying power over digital ad sellers like Google, Mr. Morgan went on to say, "Most of their media is auction-based. The fact that you buy more doesn't let you get a better price."
But that massive size is grounds for the feds to step in, wrote the Washington Post's Steven Pearlstein:
We have enough experience now to know that excessive concentration in the advertising world has not benefited consumers or the economy. Relative to the price of other things, fees have gone up, creativity has gone down and competition from new 'hot' shops only lasts until they are bought up by one of the giant groups. An entrepreneurial industry that once thrived on ingenuity and originality has become increasingly corporate, bureaucratic and focused on quarterly earnings. Omnicom/Publicis would only make it worse.
Many Ad Age readers, however, held that the merger has nothing to do with consumer or client service. It was done for the shareholders, they said.
"This historical merger will be more celebrated by Wall Street than by the client and employee communities, is my guess," wrote Marcio Moreira.
Indeed, one reader, London-based "R F" wrote that "smart investors will embrace this well-thought merger."
To which Joseph Scarpati replied: "Great to see shareholder interest trump the best interests of a client."
There was plenty of talk about clients worried about conflict packing up and heading off for other holding companies or independent agencies.
"Client actions will ultimately speak louder than words," wrote Michael McDonald. "When management has taken the time to look at the full implications of this assault on one of the keystones of the client-agency relationships, i.e., loyalty, the fallout will be seismic. This is the big bang gone berserk."
That said, the clients who have commented so far seem not to be worried about potential conflicts. "We will work with the new entity, but we don't anticipate any issues," a General Motors spokesman told Ad Age.
Publicis' Leo Burnett does work for Chevy, even as other Publicis shops already work for Toyota and Lexus. "Omnicom and Publicis have been handling conflicts within their own networks all along, and they've been very successful at it," Ian Beavis, executive VP of Nielsen Co.'s global automotive group and a former marketing executive with Kia Motors America and Mitsubishi Motors North America, told Automotive News.
Of course, no major news story in any industry these days can go without a parody Twitter account. It didn't take long for @PublicisOmnicom to get going. (It seems that a truly agile marketing conglomerate would have nailed down that Twitter handle ahead of the news.) Tweets ranged from "Come on over IPG. There's room for a third" to "Client conflicts? Look. We handled the freaking Saatchis."
Not to be outdone by social-media comedians, Ad Age reader Ken Stumder wrote: "Ask the folks at DaimlerChrysler about how well their 'merger between equals' worked out."