Publicis-Omnicom – the tale of a creative omnishambles?

By on August 5, 2013
Publicis-Omnicom

The consolidation of the ad industry isn’t doing creativity any favours – in fact, some argue it’s just lining, Gabriella Griffith reports.

The advertising industry has, since its inception, been a magnet for the world’s creatives. Based on innovative thought and originality, it draws together the most articulate wordsmiths, dab handed designers and visionaries.

But now two of the industry’s largest firms are set to merge, there’s a sense the creativity which feeds it is threatened by an overriding desire for market share.

At the weekend, Publicis Groupe and Omnicom – the world’s second and third biggest ad agencies – announced plans to merge. The news has brought with it questions about how the move will affect output from the proposed company, to be called Publicis Omnicom Group (the senior management displaying some of that patented ad industry creativity there).

Forget about the company’s combined value (R343b) and its estimated share of the global market (35.6%) – what about the work? The consolidation of industry giants Publicis Groupe and Omnicom will bring with it a hefty stack of bureaucracy – which is, as we all know, no friend of creativity.

This is a point rival Michael Roth, chief executive of Interpublic, used to reassure his staff, many of whom were presumably worried about the added competition. In a statement to his employees in light of the news, he said: ‘there’s nothing about being bigger that makes for better creative ideas, or leads to better integration of marketing disciplines.’

This sentiment has been repeated by advertising bigwigs industry over. Creativity – and by association, clients – might not have been a big consideration in this deal.

Mergers are hardly a new concept in the ad industry: ‘King Consolidation’ Sir Martin Sorrell used this tactic to grow Saatchi & Saatchi in the seventies when he was CFO, taking this strategy with him when he launched WPP.

Omnicom and Publicis themselves are both the products of multiple mergers. BBDO, TBWA and DDB have all been able to work under one ‘roof’ at Omnicom and similarly agencies like Leo Burnett and Saatchi & Saatchi and performed well under Publicis. But is this mega-merger one ‘bridge’ too far?

‘The question is whether the merged entity will provide a stable framework within which each of the individual small component parts will continue to perform,’ Chris Hirst, chief executive of Grey London, told Co.CREATE.

‘This is a talent-based business and if the talent at top of the best agencies feel destabilized because of the structure they are in, they will go elsewhere. The best talent always has options.’

One of the prevailing arguments coming out of camp Publicis-Omnicom is the strength of the fight the two ad giants will be able to bring to tech/media giants Google and Facebook.

Over the past few years, the balance of power in the advertising industry has been slowly shifting, with digital ad revenues pilling up in the pockets of the Silicon Valley big boys. But can the two traditional ad agencies really expect to challenge them by throwing agility out of the window?

‘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,’ argued AllThingsD’s Peter Kafka.

‘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.’

Arguments of cost saving in digital spends could also be misguided. Being bigger might not help to reduce the new mega-agency’s digital spend, given digital media is auction-based and therefore not affected by bulk buying.

It seems there are quite a few losers here: the 130,000 creatives working for the combined firms look set to be burdened by procedural headaches as Publicis and Omnicom get uncomfortably pushed together.

Those not crushed by the weight of bureaucracy face the chop – since cost-savings undoubtedly translate as job cuts.

As for the clients, most of whom have been very slow to comment on the proposed deal, they look set to suffer most from any potential drop in creativity. As time goes on, their actions will speak louder than words.

Creativity hasn’t died this week, but it may well have taken a bash; Marcel Levy and John Wren banging away at it in their bid to birth their ad colossus. Their deal, if it is accepted by antitrust regulators, will produce an advertising behemoth so big, the agility and creativity its industry once prided itself in could slip out of its grasp.

For the time being, creativity isn’t quite gone: it didn’t take too long for a Twitter parody to appear, creating a tongue in cheek rundown of events. @PublicisOmnicom has been pushing out beauties such as ‘Come on over IPG. There’s room for a third’ and MT’s personal favourite, ‘If you really think about it, we’re kind of like a Cronut.’ Oh, the mirth.

Given the whole deal was born out of a joke between Levy and Wren on one fateful night in New York, it seems fitting; but the question remains, who will have the last laugh?

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