Co.Create

How The Publicis-Omnicom Megamerger Will Impact Clients, Creativity (And Some Advice For The New Co-CEOs)

The merger that created the world’s biggest ad company will have a big impact on the bank accounts of some of the people involved. But how will the new Publicis Omnicom measure up as a creative partner to clients? We asked some experts to assess the creative impact of the deal, offer some advice for co-CEO collaboration and suggest some names for the new joint.

The heads of advertising conglomerates Omnicom and Publicis rocked the industry on Sunday with news that the two entities would merge to form a marketing titan with a stock market value of $35 billion and 130,000 employees.

In an business already dominated by a handful of holding companies--the big four, WPP, Omnicom, Publicis, and IPG and smaller groups like Havas, Dentsu, and MDC--the deal represented a massive sweep of consolidation. The Publicis Omnicom Group, as it will be known, will bestride the marketing communications world, and two continents, like a colossus. The head of French company Publicis, Maurice Levy, and American Omnicom boss John Wren will, for a period of 30 months, act as co-CEOs of the new entity which will be based in Amsterdam.

The deal, which makes POG the biggest advertising entity in the world (with $23 billion in revenue) bestows scale, which is theoretically helpful when it comes to things like traditional media buying. And as conventional wisdom has it, the deal also reflects the growing importance of scale as it relates to building and harnessing a big data capability. As Levy said in a statement on the deal, “The communication and marketing landscape has undergone dramatic changes in recent years including the exponential development of new media giants, the explosion of Big Data, blurring of the roles of all players and profound changes in consumer behavior.” However, it’s not clear exactly how that data strategy will play out.

While the deal does give Wren and Levy an edge over rival Martin Sorrell whose WPP has $16 billion in revenue, the new giant doesn’t approach, say, a Google ($50 billion in revenue) on this score. And, as Simulmedia’s Dave Morgan told All Things D, “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”).

And that’s what jumps out about the news of the merger: Most of the talk about the deal has revolved around this question of data capabilities as well as client conflicts and whether the $500 million in “efficiencies” sought will mean layoffs. But the conversation about clients has been light on insight into whether this new entity actually makes for a better partner for clients. In other words, how does it affect the ability of the companies and talent involved to do great work, whatever that work looks like?

Omnicom, which owns agencies like BBDO, TBWA, and DDB has long been known as the "creative" holding company. BBDO and agencies like Goodby Silverstein & Partners have been creative power players through most of the recent history of advertising as we’ve known it. Publicis owns Leo Burnett and Saatchi & Saatchi as well as having a big digital presence with agencies like Digitas, Razorfish and major media player Starcom Mediavest. Now that they’re all part of one enormous entity, how will things change at and for these companies, if at all? There’s no doubt that data is a big part of the future of marketing. But data and creativity aren’t two mutually exclusive ideas. And whether or not you consider data a part of the creative conversation, there are questions to be raised about what such a dramatic consolidation will mean for creative culture, talent and end product.

We asked several ad players from creative companies of every stripe for their forecast on the creative impact of the mega merger. We also asked for advice on good co-CEO collaboration and how the Publicis Omnicom Group could improve on that name.

There’s been lot of discussion about what this deal means for the entity’s relative ability to harness big data and its impact on stock prices, account conflicts, and on the egos of various holding company chiefs inside and outside the partnership. But what about creative? What impact, if any, does this sort of deal have on creative culture and end product?

Matt Jarvis, Chief Strategy Officer, 72andSunny
Agencies are as good as their cultures, and this is a marriage of two very different cultures. We’ll all have to wait and see what new culture emerges at Publicis Omnicom. From the sidelines it appears that the creative product was not a significant consideration in this deal. It’s for shareholders first, not for clients and not for talent.

Chris Hirst, Chief Executive Officer, Grey London
It isn’t the case anymore that small businesses are creative and big companies aren’t. People have learned how to run bigger, established agencies in a way where it is possible to produce good creative work and this merger is not necessarily going to change that. All holding companies are made up of small component parts and if this holding company provides a stable framework for those to exist then, by and large, there’s no reason to suppose the agencies won’t maintain their own identity and perform at the same standard. I don‘t think it’s going to herald an upsurge or down-surge in the net quality of creativity in the industry. 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. 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.

Bob Vallee, Chairman and CEO of Project: Worldwide
This business is all about talent. Top creative talent is going to migrate to where they feel empowered to generate the best work. Nimble, lean organizations that are focused on clients’ business needs first and foremost will excel in this new world. Unfortunately, really big, as in the case of Publicis Omnicom, is not better in the world of advertising and marketing.

Michael Ventura, Founder and CEO, Sub Rosa
Creativity is definitely a point that was overlooked in the merger’s announcement. I suspect that as the media-driven big data play becomes more central to the organization, creative talent will be the first to fly south. Coupled with the notion that there are inherent client conflicts within the network, it stands to reason that clients will seek out new partners to bring creativity to their businesses. Their media relationships, however, should continue to thrive as the merger’s aim is clearly focused on that value proposition.



David Angelo, Founder and CCO of David&Goliath
I’m pretty sure there are some obvious efficiencies of scale and global resources, but I’ve never believed bigger is better, especially in this day and age. I’ve also never believed scale leads to the best creativity. If anything, agency models need to be more nimble and more entrepreneurial in order to stay in step with today’s consumer.

Dave Luhr, President, Wieden+Kennedy
We wish Publicis and Omnicom all the best moving forward. We really do. Experimentation is close to our heart. But this is not a game we intend to play. Maybe it’s just us, but in our experience great advertising agencies are typically better at getting strong work out the door than they are at managing great numbers of people. We leave that task to our clients. The thought of managing 130,000 people around the world is truly mind-numbing. There has also been a lot of talk [since the deal was announced] about efficiencies, client conflict, agency cultures, stock prices and media and digital clout. And these topics all deserve some attention. But in reality, creative quality is the single qualifier that most clients are still willing to pay a premium for. If this merger can bring a creative resurgence inside the halls of the new Publicis Omnicom, we will be the first to raise a glass. The good news about our industry is that it has been and always will be resilient. If creativity doesn’t flow from this merger, it will invite other agencies we know and others not yet conceived to increase their creative output. And that’s never a bad thing.

John Coleman, CEO of The VIA Agency
I have never heard a client say “I wish my agency were part of a bigger holding company so they could be more creative.” And I have never heard a creative person say, “Wow, I am more creative now that I am part of the biggest holding company in advertising.” Technology is creating enormous efficiencies in the production end of our business so you don’t need huge scale to do big things. I believe now more than ever small agencies will be where the most creative work will happen in the coming years because technology gives everyone access to information and data, but it won’t give you great ideas. Those ideas come from passionate people who believe their ideas can change the world. Big, publicly traded agencies have to be more financially focused whereas small, independent agencies have the luxury to be more focused on a creative mission.

Malcolm Poynton, Chief Creative Officer Europe, SapientNitro
The single most important, yet unasked question is what does this merger mean for the creative product? The answer is, absolutely nothing. It’ll take an age for Levy’s passion for data to meld with Omnicom’s passion for creativity, at any level.

Bill Winchester, Creative Director, Lindsay, Stone & Briggs
There is a myth out there that big data and creativity can’t exist together. This is because the idea of big data telling (the analysts say “informing”) creative people what to do seems totally opposite of what inspires great ideas. The creative community bristles whenever analysis and creative are put in the same sentence. Research often has this issue as well. So the question becomes, "What role does big data play in the world of creative?" If used correctly, big data provides insights into real-time human behavior, and if you’re a creative person, you should be excited about these sorts of insights. Used poorly, big data simply becomes analysts prescribing the advertising. It remains to be seen which scenario will play out, but one thing is certain about big data: A bigger agency will have more leverage finding the people who really know how to use it. Hopefully, big data will be used for good (as in insights that drive great ideas) rather than evil (prescription creative that has no soul). Fortunately, consumers have proven to be pretty good at sniffing out and eschewing the latter.

Chris Raih, Founder, Managing Director of Zambezi
It would seem inevitable that the #2 and #3 players would join forces to overtake the #1 (WPP). This is the way of the world (in any industry) these days. But the news still sent tremors through the ad community--because true creativity involves risk. If you want to show people something they’ve never seen before, and make connections that didn’t previously exist, risk is an inherent factor. And with the new POG merger, the fear is that there’s too much money at stake for their agencies to consistently take creative risks. (Ask yourself this--would Nike’s showcase Olympics spot have starred an obese 12-year-old if a “board of directors” had to approve it first?).

Chan Suh, Chief Digital Officer at Prophet
Creativity will be challenged more than ever to prove its ROI in the face of "accountable" data and analytics. There will be a strong push to be more reactive as in test and optimization, personalized content and customized offers. This surge of attention to big data runs the risk of turning creative into a series of knee-jerk reactions to the immediate past. Some creatives will hopefully keep focusing on the kind of breakthrough, disruptive, culturally attuned ideas that can never come out of a lab. I hope we will keep both the right brain and the left brain. While the agencies are debating the data vs. creative, clients may be neglected. The smart clients will recognize that both creative and analytics have to be led by strategy--not the other way around. And clients will be looking for partners who can help them to do this effectively.

John Wren and Maurice Levy will be co-CEOs, which can be a tricky arrangement. What would your advice be for an effective CEO collaboration?

Dave Luhr, President, Wieden+Kennedy
Strong fences make good neighbors. No, in all seriousness, these are two proven and smart leaders. And with an agency this size, it will take that much and more.

Simon Bolton, Worldwide CEO at The Brand Union
My take is that Maurice will need to get comfortable drinking an oaked chardonnay and John Wren will need to realize that a great burgundy comes from the Loire. Putting egos aside, they will need to focus on developing a strong story for their clients, as well as a strong commercial strategy and approach. As a combined entity, they will certainly be powerful in media buying and strong with procurement negotiations. The new dynamic will create an interesting dilemma to solve over the next couple months. Currently, there are two cultures, two center points, and two egos. This is an enormous shift to manage. But, no matter the scale, the numbers, the conflicts, or the pain--they have to focus on relationships with clients and with talent.

Michael Ventura, Founder/CEO, Sub Rosa
I’m hard-pressed to think of an example where co-CEOs have had a lasting and balanced relationship. Perhaps they can take a page from Ben & Jerry’s and bail out to start an ice cream company together.

Chris Raih, Founder, Managing Director of Zambezi
A person is smart; people are dumb. It will be interesting to watch the 71-year-old Levy and 60-year-old Wren “share” the co-CEO title for the first two years (before Levy cedes the post to Wren in 2015). Anytime 130,000 employees are involved, they’d better be able to hear one unified voice for the vision of the company--and two lead singers rarely works. Stay tuned . . .

Jon Collins, President of Integrated Advertising Worldwide, Framestore After a good holiday on the new yacht, I would suggest that they assess the potential within the industry and their ability to influence it. They are in a position to do something much greater than helping to shift product. They should understand how they can help change the world and who they can collaborate with in order to achieve this. Chan Suh I’d say congrats to John. They are co-CEOs for only a 30-month "integration" period. I would advise them to cut that in half and get on with it.

David Angelo, Founder and CCO of David&Goliath
For starters, they are pretty smart guys. But if I had to give them any type of advice: Be the scrappiest, biggest holding company in the world.

As a name, and brand, the Publicis Omnicom Group is sort of uninspired. What do you think the name of the new entity should be?

Michael Ventura, Founder/CEO, Sub Rosa
As for a name for the new entity, considering the overwhelming lust by both entities to try to create "one ring to rule them all," I’d go with Gollum.

Matt Jarvis, Chief Strategy Officer, 72andSunny
They have 130,000 people to work on that one. They’ll crack it.

Jon Collins, President of Integrated Advertising Worldwide, Framestore
My initial thought is that Publicis Omnicom is taking over the world, so why not call it World? It’s bold, it’s global and it’s huge and they now have many different agency cultures housed underneath them. World seems appropriate since the new entity has the opportunity to change it.

Mark Roalfe, Chairman and Founder, Rainey Kelly Campbell Roalfe/Y&R
What should the new agency be called?  Given its size, Omnipresent.

John Coleman
Ominis.

Chris Raih, Founder, Managing Director of Zambezi
Corporate name changes are tricky. The Publicis Omnicom Groupe handle is somewhat unimaginative, but it’s clearly a play to retain the perceived power and sweep of the two partner companies. One watch-out: the acronym POG can easily take on a new meaning by swapping out a vowel in the middle. Oink-oink…

David Slayden, Executive Director, BDW
I understand the reason for the combined name as a way to build on the equity of the two brands. Perhaps they are going to change this in the future, but I doubt it. To rebrand under a single name like, say, Kumquat, would signal that they plan on being a single new entity that takes the best from each company and evolves. Right now the merger seems like a marriage of convenience along with a “bigger is better” mentality.

Bill Winchester, Creative Director, Lindsay, Stone & Briggs
Publicom? Omnilick? Pubnicomcis Group? How about just being honest, Bigass Agency Group?
Or, here’s an idea: Just use a computer to generate names--that way, big data can tell you what the name should be. Here are a few my computer came up with:

- The Brutes of Cipyar
- Kingdom of Acomatha
- Brothers of Virdo
- Greenmedia
- Digital Alpha

Maybe put those out in the ether and let people vote and then analyze the big data that comes back.

David Angelo, Founder and CCO of David&Goliath
I don’t know, but I’m sure there will be many, many meetings to discuss this.

Malcolm Poynton, Chief Creative Officer Europe, SapientNitro
We always advise clients that truth matters where brands are concerned so, as unimaginative as it may sound, the merged holding co. should be named Our Holding Company Is Bigger Than Your Holding Company.

[Images: Shutterstock, adrants, World Economic Forum, Flickr users Charles Knowles, Crystal, Marc Kjerland, and Tinou Bao]

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2 Comments

  • Lisa Glover

    Matt Jarvis, you nailed it! From a client standpoint, brands ought to start connecting with smaller in-house agencies. Over the past decade, there has been a major shift in the consumer
    landscape, due in part to the global recession and the rapid emergence
    of digital technologies. The marketing industry is evolving to accommodate the demands of
    consumers. Agencies that are moving away from the methods implemented by
    the “Big Four” (now the "Big Three") are responding more efficiently to the hyper-segmented
    culture that exists today.

    We've highlighted all of this in our White Paper - "Marketing 2020" which examines the past and forecasts the future of advertising. Check it out, let us know what you think. www.convoagency.com/marketing2...

  • boyinthebarrel

    This mega-merger has nothing to do with creative output, and everything to do with 500 people fattening their retirement packages and 2,500 people losing their jobs. I feel the most pain for the guy responsible for migrating the entire Omnicom network over to Lotus Notes. Bon chance!