Big news in ad land. Will this merger work? It’s not surprising Omnicom and IPG want to merge given that the big bloated ad holding cos are way overdue for consolidation. They are losing control of ad spend which is the cornerstone of their outdated biz model. And now they’re trying to pivot fast. But, will a merger solve for this? My take? This merger buys them time. It’ll work if they streamline in a hard and painful way. That means a lot of job cuts and some new hires. And it means a totally new structure of how services are designed and delivered. That means reducing the hold co layer (useless expensive overhead) and blowing up all the agency silos. No more P&Ls that fight each other. Refocus to deliver what clients want. Services that are agile, specialized and seamless. And refocus to be the client advocate- something they’ve lost sight of. Having worked for IPG, Omnicom, WPP and Publicis during my career, I’ve seen that they are all alike and share the same challenge. I fear the newly merged holding co will cut everyone below them - not themselves. And they don’t understand how to design for the future given most of them don’t understand digital media or technology. What do you think? How can this merger be successful over the long term?
WSJ Scoop: Mega-Ad Merger in the works. w/Lauren Thomas Ad giant Omnicom is in advance talks to merge with Interpublic, setting the stage for a seismic shift in the industry. With just days left in 2024, Omnicom is making a bold play to claim the top spot and reshuffle Madison Avenue's leaderboard. Hold on tight folks.... this will only be the start of a very interesting year in ad land, as the business of advertising races to keep up with new technologies that are quickly remaking the business once again. #marketing #Advertising #MadMen
I predict same sh*t, different day. Like you pointed out, until the standalone P&Ls are eliminated there are no real “synergies” happening IRL, only marginal back office cost savings on a dinosaur business model. My own experience in the agency world, and with the people who inhabit the holdcos’ top ranks, makes me doubt it’s capable of saving itself. With pressure from clients for relentless cost cutting and apparent satisfaction with mediocre creative work, and media $$$ still falling, I can’t see how the ship rights itself. These trends have been in place for decades and the holdcos haven’t solved for them. Previous big mergers haven’t delivered change, just consolidation. Breaking up the holdcos would create more energy than further consolidation.
Agreed with the thinking and POVs Patricia... just hoping for better outcomes. Everyone needs to figure out how to work better together with a unified, collective intelligence framework. I would love to work on the integration and preservation project. 😀
Global CEO @ Meet The People | Co-Founder & Investor
2wIn taking the popcorn 🍿 out and will watch how this unfolds 🙏