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In this week’s episode of the Inside PR podcast, Gini Dietrich, Martin Waxman and Joseph Thornley talk about the Omnicom Publicis merger. Will this yield opportunities for independent agencies? While the deal seems to have be driven by considerations of scale and efficiencies, what of the creatives who actually attract the clients? What about the clients themselves? Where was the client demand for this type of a deal? And what about the front line employees? Will they see immediate benefits from this deal or will they experience uncertainty as they wait for the other shoe to drop? Will they be distracted? Will smaller clients suffer from inattention as management focuses on securing the larger clients? And what about PR? Where does it fit in the thinking of the new mega-holding company?
Also in this episode, we discuss Hootsuite’s $165 million funding round and we receive a comment from David Jones, one of the original Inside PR podcasters.
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Regarding the merger, I think the thing to remember is that this a combination of holding companies, not agencies. I can only speculate that this is driven by share price and not client service. In fact, this will have very little impact on the day-to-day with the exception of any client deals that happen at the holding company level, which are very few. Clients want agency partners that deliver and if they don’t, they’ll move to the next one. As far as efficiencies go, I don’t see any consolidation among creative agencies, but with the commodification of media buying it’s possible to see things happen there as this agencies really benefit from scale.
David, thank you for the perspective from the inside of one of the operating companies. I’m not surprised that it’s business as usual so far. I remember that the impact of the merger I was involved in hit our office several months after the actual merger. It was only at that point that the larger of the two auto clients that we now had in the combined company raised the issue of conflict. The bigger client was handled out of LA. The smaller client out of Toronto. Needless to say, the holding company chose the larger client and we had to resign the smaller Toronto-office client. The result: a drop in morale and some staff departures. All this happened several months after the merger.