By Kristina Monllos  •  December 12, 2024  •

Ivy Liu

Omnicom and Omnicom leadership

Eleven years ago, when the Publicis/Omnicom deal fell apart, one of the reasons it did was confusion about who would lead the combined entity. It’s already clear that Omnicom leadership will be in charge should its acquisition of IPG go through and that the name of the combined holding company will be Omnicom — another signal of who is in charge. That’s a win for Omnicom CEO John Wren, according to analysts and agency executives, who said that if the deal goes through it will help cement Wren’s legacy.

“I think the winners are Omnicom leadership because they’re going to be running it,” said Allen Adamson, brand consultant and co-founder of Metaforce. “And Omnicom is a fairly well-run holding company so they are the winners. Their model of integration is the winner.”

Retained IPG employees

While there’s the expectation of significant job loss (we’ll get to that down below) and the difficulties of that for those affected, some expect that IPG employees who remain will be among the winners of this proposed deal. They’ll have more resources with the combined power of a bigger holding company and the potential for new leadership positions within the organization, according to industry analysts. It could help them “chart a really positive future,” explained Jay Pattisall, vp and senior agency analyst at Forrester.

Retained clients

While Omnicom and IPG leadership are busy assuring clients that all is well, for clients in categories where conflicts exist, the expectation is that the bigger brands will be retained — should they desire to stay with the new behemoth. With that said, for the clients who do stay under a combined Omnicom and IPG, the assumption is that they will benefit not only from the combined buying power of the two holding companies in the media marketplace but also from their combined technology prowess — a point that Omnicom and IPG leaders tried to hammer home on Monday’s call announcing the acquisition plans.

“Clients benefit from that added expertise and combined expertise,” said Pattisall.

MediaLink executives echoed that sentiment, noting that clients they’d spoken to were excited by the prospect of the combined holding companies, particularly the combined technology capabilities and the potential for the partnership to benefit retail media offerings.

While there is a perceived lack of choice anytime there’s consolidation in adland that some see as a negative, the expectation is that the combined buying power of Omnicom and IPG and their technology integration will ultimately benefit those who work with a new Omnicom.

Losers

Talent

“Efficiencies” is often a codeword for “redundancies” when it comes to acquisitions. The efficiencies Omnicom and IPG find attractive about this acquisition will likely be achieved by finding redundancies. That means many talented people may have to find a new place to work in an advertising job market that is already flooded with many other talented people seeking work. It’ll be a difficult time for many when and if that comes to pass. Until then, there’s a looming assumption that there will be layoffs, which won’t be easy to manage over the next year or so.

Even for the talent retained by a combined Omnicom and IPG, they’ll likely end up feeling the pressure to do more with less. Put simply, once those redundancies are identified following an acquisition, “you’re either [screwed] or you’re you have a lot more responsibility,” said an ad exec who requested anonymity. That kind of culture often inspires people to leave anyway.

One bright spot for affected employees: the potential for another new wave of independent agencies born out of this disruption to the industry. That’s the hope that many shared. Whether or not that will be the case, we’ll soon see.

Agency brands and culture

Consolidation has been a norm for adland in recent years. Holding companies are continually mashing together agencies and even creating new nonsensical names. It’s expected that will continue should Omnicom be able to acquire IPG, as consolidation will be necessary to reach the scale and efficiencies the combining companies desire. When that consolidation happens, often the culture of a particular agency and their agency brand are lost.

“Inevitably they’ll end up doing what WPP is doing, which is saying we have four small agencies, let’s make one medium-size agency by mushing them together,” Adamson said. “As you mash them together, you lose the culture. You lose A-plus talent. And in professional service particularly advertising, I think the two strongest competitive levers are talent and culture and holding companies notoriously destroy culture.”

The rest of the competitive set

In recent years, there’s been a sense that Publicis is the holding company to beat. Investments in technology platforms like Epsilon have paid off for the holding company and acquisitions like Profitero, Influential and Mars United Commerce, among others, have helped bolster Publicis above its competitors. A combined Omnicom and IPG is a challenge not only to Publicis’ position at the top, but also to the other holding companies, as Omnicom and IPG’s combined buying power will be a challenger to WPP’s GroupM, for instance.

“Clearly there’s a game of chess that’s happening here between Publicis and Omnicom and we just saw one of the moves across the board,” said Pattisall. “The game is still being played. We’re not at the end. We’re at the beginning.”

It’s not just the top players that will be challenged by this potential acquisition. Other medium-sized firms will be challenged by this shake-up to the industry, too.

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