I work in the advertising industry and this post is my thoughts, not necessarily representative of my employer.
This past Friday, I learned from Bloomberg that Publicis and Omnicom were in plans to merge. I am sure there will be plenty of reactions to this and I’m one of many who have written about it. We await the details tomorrow morning but if this goes through, it has repercussions for the entire industry.
Someone much smarter than me shared this line earlier today: History has proven that size and creativity tend to be inversely proportional, and that scale is the enemy of innovation. He’s right and proven by our history laden with companies who have tried (AOL/Time Warner, BofA/Countrywide, Daimler-Benz/Chrysler, etc) and failed.
There is absolutely no doubt that having $25B worth of buying power is a good position to be in, but I have some questions:
1. Is that $25B in the right place for the future of marketing and advertising? Publicis/Omnicom just made it even harder to evolve for the future. Turning a juggernaut out of solely a “paid” media agency world to a “paid/owned/earned” is something that’s not simple at all. Having 25 billion reasons not to do it is tough. But focusing on paid media only over the next decade is a total miss.
2. Talent numbers: Google and Facebook have proved that they can attract talent, but at a certain scale, it’s a different type of talent you need to attract. I read somewhere that this combined group will be roughly 130,000 employees. I’m pretty sure the most innovative people in our industry do not want to be employee #94,212.
3. There will be conflicts: I have to imagine that there are quite a few conflicts in this new combined entity regarding clients. In our agency world, it’s hard to work for two clients in the same industry. If Publicis/Omnicom is looking to unload a client, I’d be more than happy to talk to them.
The big opportunity for this new combined entity, that I see, is to roll out one of the largest biddable media trading desks that the industry has ever seen. Why this is a big opportunity is because at $25B and 130,000 employees, you are essentially buying and selling pork bellies (there is nothing wrong with that). If the goal of the merger was to lower media rates for your clients, then this was purely a commodity merger. Setup the biggest technology enabled infrastructure which has already been started at AOD and Accuen and go-to-market with a real-time ecosystem for every one of the Publicis Omnicom Groupe agencies. I think that’s exciting.
But for everyone else, including us, the world just opened up. There will always be clients who want “global scale” and commodity based buys. Thirty second spots are a necessary component for some clients. CBS and NBC will be there to solve for this. But where does the innovation come in? As the majority of marketing becomes digital, not saying it’s a banner ad, but digitally delivered, a new communications construct is opened up and we’ll be communicating with consumers (and vice versa) in ways we’ve never thought or imagined, all enabled by technology. I cannot imagine having a $25B legacy balance sheet will allow for the change that this new ecosystem will need.
I’m excited for what’s next.