Of course, there’s more to the creation of a $35 billion marketing services behemoth than that – but, actually, how much more?
Since the news broke at the weekend, the markets have been underwhelmed. At the time of writing, Omnicom and Publicis share prices are below their levels last week. Clients are also confused. One confided: "This is huge – a fundamental shift in the industry’s power base – but how are we impacted? We are just not sure." Most UK agency bosses within "Publicom" are currently too uncertain to express a view, but privately concerned about how it will impact their businesses, people and decision-making powers in the coming months.
We are entering a fascinating era. Never has the industry been more under the control of powerful and egotistical men
What is clear is that Publicom has so far failed to sell the benefits of the deal to many stakeholders.
Sure, everyone can understand that Omnicom’s Wren and Randy Weisenburger benefit. The group’s share-price performance has been languishing since July last year, profit margins remain south of 13 per cent, and it has been slammed for comparative lack of firepower in digital and emerging markets.
Its new partner, Publicis, performs better on all these fronts. But then Lévy gains from more power, money, chairmanship of a potential Fortune 100 company and relief from the long-running saga over his successor.
Ultimately, however, Publicom needs to convince brands that it will be able to offer them superior creative, digital and media solutions. Unfortunately, there is little precedence for this in adland merger history.
Publicom is promising $500 million in "cost savings" – again, worrying for its UK agency chiefs – but, instead, the ad business is crying out for top-line organic growth; new work and approaches that excite talent and clients.
To his credit, WPP’s Sorrell tells me that he will pursue organic growth rather than further mergers. But even he doesn’t know how this one will play out.
The mega-merger does provide an opportunity for independent consultancies, particularly if we see an exodus of talent and clients from Publicom. But, in reality, few independents possess the scale that the big brands demand, so we will likely see consolidation further down the chain.
We are entering a tumultuous and fascinating new era in the marcoms business. Never has the industry been more under the control of powerful and egotistical men. On the other hand, never has the pace of change been faster, and the opportunity to bring fresh, entrepreneurial ideas to the table more enticing.
danny.rogers@haymarket.com
@dannyrogers2001