As Omnicom Group moves forward with its acquisition of Interpublic Group (IPG), marketing executives are preparing for potential disruptions while also anticipating possible benefits from the increased scale of the combined company.
The acquisition, valued at more than $13 billion, will create a leading force in the advertising industry, with Omnicom and IPG executives emphasizing the potential to provide clients with enhanced marketing capabilities through a more comprehensive understanding of consumer behaviors and transactions.
Despite the merger’s promises, industry leaders acknowledge that the integration process could create turbulence for clients. Linda Boff, CEO of marketing agency Said Differently, emphasized that the primary concern for chief marketing officers (CMOs) is ensuring that agency leaders remain focused on their clients amid the distractions of integration efforts.
“Something on this scale will be a huge distraction,” said Shiv Singh, former CMO of LendingTree.
He noted that many executives worry about the time spent in integration meetings, which could take away from their ability to manage client relationships.
Omnicom has reassured clients that only a small group of corporate employees is involved in the merger, while agency leaders will remain focused on their business. The holding company is determined to avoid disruptions, ensuring that day-to-day operations continue smoothly.
The merger is also expected to lead to consolidation within the combined company. According to Ken Robinson, co-founder of Ark Advisors, the merged entity may prioritize a few key agencies while using others as conflict shops or niche specialists. As a result, clients could seek alternative options from rival agencies like Publicis Groupe or WPP, or smaller independent firms, to avoid potential conflicts of interest or to mitigate any growing uncertainty about agency branding changes.
Worries about client defections have also been raised, but Omnicom’s Chairman and CEO John Wren remains optimistic.
“Could it happen? Yes. Will it happen? Yes. But I think people would be shortsighted in doing that,” he said.
Wren suggested that switching agencies during the merger would be a difficult and costly process for clients.
As the companies combine, some high-level executives could depart in order to achieve the predicted $750 million in annual savings. However, Omnicom has expressed confidence in providing new career opportunities within the merged entity, ensuring that both cultures remain sensitive to the needs of their teams.
The merger’s potential benefits include increased scale and leverage, which could provide cost savings for clients, especially with the combined companies’ media-buying power. This is seen as a significant advantage for advertisers looking to tap into global reach and technological resources, including emerging artificial intelligence capabilities. Doug Sweeny, CMO of wearable tech company Oura Health, expressed enthusiasm for the efficiencies that the merger could offer.
However, the deal may also lead to concerns about the transparency of media transactions, with Ruben Schreurs of Ebiquity noting that the larger agency might adopt a principal-based approach to media buying, which some marketers may view as less transparent. While increased buying power could lead to savings, it may also create new challenges in balancing clients’ interests with agency profits.
With the merger expected to create the largest global advertising agency group, some clients may feel limited in their options, particularly if they wish to avoid working with competitors. But industry experts point out that marketing remains an industry driven by relationships, and CMOs will continue to have significant influence despite fewer choices among the largest holding companies.
