{"id":37705,"date":"2013-07-30T09:54:46","date_gmt":"2013-07-30T08:54:46","guid":{"rendered":"https:\/\/www.vuelio.com\/uk\/?p=37705"},"modified":"2013-07-30T09:54:46","modified_gmt":"2013-07-30T09:54:46","slug":"publicis-omnicom-group-the-real-mad-men","status":"publish","type":"post","link":"https:\/\/www.vuelio.com\/uk\/blog\/publicis-omnicom-group-the-real-mad-men\/","title":{"rendered":"Publicis Omnicom Group – The real Mad Men"},"content":{"rendered":"
\"handshake\"

Photo Courtesy: Aidan Jones<\/p><\/div>\n

Mad Men fans will probably remember the \u2018you show me your pitch, I\u2019ll show you mine\u2019 episode in season six that culminated in a merger between the rival ad firms of Don Draper and Ted Chaough, sealed simply with a handshake over a scotch in a dingy bar in Detroit. That was Madison Avenue of the 1960s and things stayed much the same in the real world until Martin Sorrell and the Saatchi brothers came along and \u2018acquired\u2019 it. The following four decades has been strife with mergers and acquisitions for the global advertising industry which has seen many small shops sell out to the bigger agencies and integrate resources under adland\u2019s \u201cBig 4<\/a>\u201d holding companies namely, WPP, Omnicom Group, Publicis Groupe and the Interpublic Group of Cos.<\/p>\n

Today a new battle<\/a> ensues among the big guys who are competing within the digital space <\/a>and for the few internet giants in whose hands a large chunk of ad spends are concentrated. With little scope for horizontal growth, the top ad companies are now turning their sights on one another to create monopolies and overthrow rivals. <\/p>\n

Sunday\u2019s announcement of the proposed $35bn\u00a0(\u00a323bn)\u00a0merger between America\u2019s Omnicom and France\u2019s Publicis which will oust Sorrell\u2019s WPP to take on the number one spot in advertising, is testimony \u00a0to to the height scaled by the ad industry. Interestingly though, it is not so much the mega deal, as its complexity and the impact it is likely to have on the media, advertising and PR\u00a0 sectors that industry experts remain skeptical about.<\/p>\n

Labeling it as ‘bold, brave and surprising’\u00a0Sorrell, for starters is understandably cynical of the partnership between his biggest rivals. Media reports<\/a> quoted him as saying that:\u00a0‘time will tell if the cultures will click and whether clients and talent benefit \u2013 and how $500m of synergies will be generated without job cuts. Co-CEOs is not an easy structure.’<\/p>\n

The merger is also drawing close scrutiny from antitrust experts and regulators who believe the sheer size of the two companies (which when combined\u00a0would control 40 percent of U.S. media spending and 20 percent of the global market), would be “anti-competitive”.
‘The merged firm is going to be able to influence strategy for an entire industry,’ Bert Foer, head of American Antitrust Institute\u00a0said<\/a> in a phone interview. ‘They will have a unique ability to tell clients, “Here\u2019s what you need to do,” and an enhanced ability to coordinate strategies such as when to introduce new products, how to price them and how to market them.’<\/p>\n

In a blog titled\u00a0‘Bigger, stronger, madder<\/a>?’, the Schumter columnist from the Economist pointed out:
\u2018The creation of the new combined firm, Publicis Omnicom, came as a surprise both to rivals and clients, some of which grumbled privately that they had not been consulted. Keeping both PepsiCo and Coca-Cola happy within the same firm will be one of the many problems it has to deal with,\u2019<\/p>\n

Haymarket Group\u2019s PRWeek<\/a> pegs the combined fee income from the two companies at \u00a385million<\/a> and warns of cost saving consequences the deal will have on advertising and public relations field. Lansons Communications founder Tony Langham quoted here, said: \u2018There will be a lot of nervous senior UK PR folk this morning (Monday) as rationalisation at senior level is inevitable.\u2019<\/p>\n

Bob Hoffman, author of \u2018101 contrarian ideas about advertising,\u2019 is doubtful on the efficiency this mega deal will actually translate into. In his blog<\/a> he said: \u2018As in so many other fields, the ad industry has discovered that it is way more profitable to provide a mediocre product to a lot of people than a high quality product to a few.<\/p>\n

\u2018Just look at the airline industry, the banking industry, the telecom industry, the fast food industry. They provide mediocre products to massive markets. It’s what huge companies do. It’s what markets demand.\u2019<\/p>\n

In agreement is Avi Dan, marketing and advertising expert and contributor to Forbes. He argued<\/a>:\u00a0‘As companies grow bigger they tend to get less efficient, slower and more bureaucratic because they become harder to manage. It would be a while before the combined company figures out its org chart, leading management to focus internally and not on client business.’<\/p>\n

Meanwhile, experts believe the merger is an indication of things to come in the world of advertising. The Economist<\/a> cautions, ‘it will be no surprise if Martin Sorrell, WPP\u2019s boss, soon pulls another deal out of his hat to return his firm to the top of the \u201cMad Men\u201d league.’<\/p>\n","protected":false},"excerpt":{"rendered":"

Mad Men fans will probably remember the \u2018you show me your pitch, I\u2019ll show you mine\u2019 episode in season six that culminated in a merger between the rival ad firms of Don Draper and Ted …<\/p>\n","protected":false},"author":322,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[3531,3695,4708,5741],"tags":[4755,409,678,4745,4746,4747,4748,4750,4751,4752,4753,4754],"_links":{"self":[{"href":"https:\/\/www.vuelio.com\/uk\/wp-json\/wp\/v2\/posts\/37705"}],"collection":[{"href":"https:\/\/www.vuelio.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vuelio.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vuelio.com\/uk\/wp-json\/wp\/v2\/users\/322"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vuelio.com\/uk\/wp-json\/wp\/v2\/comments?post=37705"}],"version-history":[{"count":0,"href":"https:\/\/www.vuelio.com\/uk\/wp-json\/wp\/v2\/posts\/37705\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vuelio.com\/uk\/wp-json\/wp\/v2\/media?parent=37705"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vuelio.com\/uk\/wp-json\/wp\/v2\/categories?post=37705"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vuelio.com\/uk\/wp-json\/wp\/v2\/tags?post=37705"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}