"What we will do is continue to build our business in China in
exactly the same way as we have done, which is largely organic,"
Mr. Sorrell said.
China is poised to become the world's second-largest ad market
in the next couple years, if not sooner, but it has been a longtime
focus for Mr. Sorrell. WPP entered the market earlier than its
competitors and invested heavily. Today, WPP has 16,000 staff in
China and derives 40% of its revenues from local marketers.
Mr. Sorrell said he recently visited 17 Chinese marketers over
two weeks, including some in the western cities of Chengdu and
Chongqing.
"The conventional wisdom in the West is Chinese companies steal
intellectual property but nothing could further from the truth.
They're innovative, they understand marketing and Randy
Weisenburger is totally wrong," he said.
Mr. Sorrell was referring to a news article from last year in
which Mr. Weisenburger, Omnicom's CFO, said Chinese companies don't
want to pay for high-end marketing services.
Omnicom has traditionally been U.S.-centric and slower off the
blocks in China. Now, with fewer targets still available for
acquisition, a top Omnicom exec in China has said the company may
need to import talent from other markets to bring in additional
capability. The holding company's business in China is skewed
toward major multinational clients.
Publicis has made numerous acquisitions in China over the past
few years, in keeping with its overall strategy of developing
digital expertise. It reported an organic growth rate of 14.7% in
China in 2012, and VivaKi is one of the most powerful media
buying agencies in the market.
Publicis Groupe Chief Operating Officer Jean-Yves Naouri is the
company's point man on China, committing to traveling to the
country once a month. Publicis' goal was for China to become its
second-largest market by 2015.
With such disparate China strategies coming into the merger,
it's not clear how the new Publicis Omnicom Group will
tackle the market going forward.
An Omnicom spokesman said Serge Dumont, Omnicom Group vice
chairman and chairman of Asia-Pacific, was unavailable to comment
and referred questions to New York headquarters. Mr. Naouri did not
respond to an emailed request for comment by press time.
One industry analyst said potential obstacles for the deal in
China, like in other markets, are anti-trust issues on the
media-buying side. The combination of Publicis' Vivaki, already
dominant in China, with Omnicom's Omnicom Media
Group may raise flags.
"They would have a very clear advantage in terms of total buying
volume," said the analyst, who spoke on condition of anonymity due
to the sensitivity of the topic and the merger's impact on his
agency clients. It's too early to say whether Chinese authorities
will question the merger.
Publicis Omnicom Group's co-CEOs-to-be, Maurice Levy and John
Wren, have said they don't expect any regulatory problems.
