On Sunday, advertising juggernauts Publicis and Omnicom announced plans for a merger of unprecedented scale. The French and American firms will be joining forces in a deal that is set to make the forthcoming consortium one of the largest ad firms on the planet, with over 130,000 total employees spread across three nations.
This deal has been designed to shape the company, henceforth to be referred to as the Publicis Omnicom Group, into an unstoppable industry force. Combined, the separate companies have done roughly $23 billion in revenue through the 2012 fiscal year. Together, they are home to over half of the entire industry’s networks. Omnicom owns BBDO and TBWA Worldwide, while Publicis owns Leo Burnett and Saatchi & Saatchi, amid a host of smaller firms. The star-studded client lists that both firms boast range from cosmetics giants to the upper echelons of the automotive industry.
With such gaudy numbers, it seems upon a cursory inspection as though this merger wasn’t strictly necessary. However, given the rapid rise of digital marketing over the past several years and the meteoric expansion of Silicon Valley, traditional communications and ad firms have seen a somewhat relative decline in industry prominence of late.
The massive uptick in digital ad spending has particularly favored Google and Facebook, which both run online advertisements and offer marketplaces for them, based largely off of collected user data that allows advertisers to target particular consumers with ads that are tailored to their particular interests. Due to the large amount of data that these websites inherently collect, they have a massive advantage over more traditional communications firms in the booming realm of digital advertising. This merger is, in many ways, a defensive maneuver designed to combat Silicon Valley’s bounty of information with sheer size, clout and manpower.
Although some pundits have predicted that this merger will lead to a substantial upheaval in the automotive advertising sector, the reality is that this is quite unlikely. Frankly, it’s unreasonable to think that this merger will disturb current automotive advertising or decrease its efficacy in any way.
The main concern cited by these detractors is that this merger may generate conflicts between various competing brands. While it is true that the deal does involve the marketing for a host of automakers, including Cadillac, Chevrolet, Lexus, Mercedes-Benz, Nissan and Toyota, there is little legitimate concern that the merger will catalyze any sort of conflict. Due to the sheer size of the companies in question and their diverse holdings, it is likely that a conflict, if it could exist, would have erupted long ago.
This merger can actually be viewed as positive news for automakers, given that the firms that advertise their products will be theoretically better equipped to combat Silicon Valley firms in the ever-expanding world of digital advertising. Moving forward, it can be assumed that this news, while momentous, will not be a source of alarm for automakers, but rather potentially the opposite.
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