Publicom Was Good for Small Agencies but Collapse Is Even Better
For years -- perhaps eons -- mankind has fervently debated the question: Is it the size of the wave or the motion of the ocean?
Last July, I wrote about "Three Reasons Why the Birth of Publicis Omnicom Is Good for Small Agencies." Today, I'm writing about three reasons why the collapse of the mega-merger is even better.
Reason #1: The pace of change
Just before the announcement of the merger last July, Dan Wieden described the holding companies as "wobbling drunkards" that didn't have a clue what to do with themselves in an advertising landscape turned upside down.
The collapse of OmniPub proves that Dan was right.
All of this merging and unmerging has been done in spectacular fashion in the public eye. Brands have witnessed this buffoonery taking place.
Did you ever really understand the strategy behind the merger? If not, you're not alone. People couldn't articulate the strategy because there wasn't one. Now, the titans of our industry have been exposed for not having a clue.
Small agencies, ironically, offer stability. We are able to adapt to the pace of change because we are closer to the ground. It's like playing Jenga -- when you only have a few pieces, your structure is small but strong. Once you pile up 30 or 40 tiles, you can become unstable.
Reason #2: The value proposition
The value of this proposed merger never became clear to clients. That's because there was no significant value to extract. If there were some treasure trove of value to be unlocked, it wouldn't have been so easy for both sides to walk away from actualizing it over a pissing match about who got to be CFO.
If there was no compelling value proposition for the participants of the merger, you can be sure there was no compelling spillover of value to their clients.
Ad tech has democratized the media landscape. Everyone has access to the same tools and the same data. That means being huge doesn't bring all that much value.
But being small does. Small shops bring value because we rely on talent, not economies of scale. We benefit from this leveling of the playing field and get to compete based on the quality of ideas and their execution.
I'll play that game any time.
Reason #3: Clients pay for this mess
The POGs spent the better part of the past year distracted by a fool's errand. Clients were neglected -- they had to have been. Omnicom CEO John Wren's comment that the $60 million squandered on this fiasco is "not a lot of money" illustrates just how out of touch they really are.
Publicis and Omnicom will try to regroup and put the focus back on clients, but it's a fickle world. Once they lose a client's trust, they aren't likely to win it back. Nine months ago, I posited that it wasn't too far-fetched that competitive conflicts could trickle down to a client or two coming the way of small independent agencies. Clients have far greater tolerance for competitive conflicts that don't really impact their business than they do for being ignored.
MDC Partners CEO Miles Nadal commented that these companies' best course of action is to "put their heads down and drive financial performance." According to basic math, that means trying to squeeze more money from brands and spending less in exchange for it.
Not an easy feat when you spent the last nine months blowing those brands off.