The ancient world, in the times of Greeks and Romans, had a way of working. They used to make offer to other kingdoms either to merge with them, or be battle-ready, in other words, be defeated and get acquired. Merger, albeit meek in appearance, was fundamentally peaceful in nature. Battling against mighty kingdoms, though masked in courage, was nothing but another chronicle on bloodshed for the historians. The modern world, as we know of now, is different. From colonial mergers and acquisitions, we have transitioned to economic/business mergers and acquisitions. The style is still the same – mergers are amicable with employees not often at the risk of losing jobs, and being stockmarket-friendly in nature; acquisitions, especially hostile in nature, lead to layoffs, fragile sentiments and often result in a fall in stock prices.
Marketing has never seen too many mergers and acquisition, save WPP CEO Martin Sorrell’s Alexandersque conquests that created the world’s largest marketing company both in terms of revenue and profits, only to be overtaken by the coming together of Omnicom and Publicis, the two other giants in the marketing space. The two CEOs of Omnicom and Publicis, not long ago rivals to each other, were pictured as brothers-in-arms in front of famous Charles de Gaulle on Champs Elysees in Paris. The media has labeled it as ‘mergers of equals’ with their collective market cap of USD 35 billion. The two conglomerates will bring together some of the biggest names in advertising – BBDO Worldwide, TBWA Worldwide and DDB Worldwide (Omnicom) and Saatchi & Saatchi, Leo Burnett (Publicis). Of course, Publicis’ recent acquisition run has seen them gobble up marquee digital agencies such as Digitas and Razorfish. (Domestically, Publicis has laid hands on NCR-based iStrat, whereas TBWA got a share in Magnon Solutions).
With inorganic growth the way to go, it will be very interesting to see how “Machiavelli of Advertising”, Sorrell responds to this merger. In my own naïve opinion, he should just observe this trans-border marriage for now, before making any big plans. It’s clear that WPP might have lost its advantage, but it is still leaps and bounds ahead of the advertising couple in emerging markets such as India and China, where Omnicom and Publicis have never made mighty inroads. WPP’s strategy of investing in emerging markets might just be the differentiator that won’t allow Omnicom Publicis to gain traction in the eastern economies. Also, non-western agency such as Dentsu is fast catching-up in India with strategic client and agency acquisitions (such as that of Webchutney). It would be particularly interesting to see the strategy that the new leader adopts towards India and China, and also towards digital marketing. Publicis has largely invested in digital in the past few years, whereas Omnicom is still more traditional-heavy.
All in all, this marriage of two different characters seems to be made in advertising heaven, and might even muscle their collective clout for sometime to come, unless we have another unexpected merger in the near future. You never know!