Indie Shops Spy Opportunity in Merger Fallout

Client Conflict Could Prove Fruitful for Small Shops

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Many are mulling over what the biggest merger in advertising history means for the industry -- and not just at agencies directly affected by the marriage of Publicis Groupe and Omnicom Group. Some are concerned this new Goliath could squash the masses of smaller Davids with their joined resources, data and footprint.

But proponents of the independent-ownership model are urging small agencies not to fear being squeezed out, but to strike while the iron's hot. As the merger faces regulatory review during the next few months, their hope is that the two behemoths will be sidetracked, allowing smaller shops to recruit talent and attract new clients.

"This as a giant opportunity," said Gary Burandt, exec director at Icom International, an independent agency network. "You're going to have a lot of [Publicis Omnicom] agencies being very distracted in the near term."

One way to be proactive: "Quickly review the agencies involved in your marketplace and the clients they serve" for conflicts, Mr. Burandt said. "Make contact with the clients involved in the conflict and say, "We're an established agency, we're run by people of this marketplace. You don't have to go through the insecurity that's bound with this merger.'"

The Association of National Advertisers acknowledged some clients may start shopping for indie shops. "This may now present an opportunity for smaller and midsize agencies to be seen as attractive options if clients are concerned about conflicts from this merger or the now reduced number of holding company options," said Group Exec VP Bill Duggan.

Greg Stern, CEO at BSSP -- an agency affiliated with indie network Worldwide Partners -- pointed to the $500 million in efficiencies Publicis Omnicom promised in the deal as another opportunity. He predicted cost-cutting could leave talented staff out of jobs, and other employees may become disenchanted with the new company and leave on their own accord.

A prime concern for indie shops in battling the big agencies is always lack of scale and geographic footprint. As a result, the deal could spur such agencies to collaborate more, and networks like Icom and Worldwide Partners pitching multinational marketers to grow their membership. "If the primary reason for some of the bigger clients to choose holding company networks was a footprint, maybe that rationale isn't as important if they can find that same footprint through an independent network," said Mr. Stern.

Independent agencies and networks should have been positioning this alternative all along, of course, "but the merger is an impetus to do it now," said Mr. Burandt. "Now's the time to approach those clients and give them a secure alternative in their marketplace without having to give up international resources."

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