Publicis and Omnicom merger 'unlikely' to prompt short-term PR shake-up

Advertising rather than PR is likely to be hit first by cost savings following the Publicis and Omnicom deal, it has been claimed.

Joint CEOs: Publicis' Maurice Levy (l) and Omnicom's John Wren will be co-CEOs of Publicis Omnicom Group
Joint CEOs: Publicis' Maurice Levy (l) and Omnicom's John Wren will be co-CEOs of Publicis Omnicom Group

Yesterday the two holding groups announced a tie-up, set to knock Sir Martin Sorrell’s WPP off the top spot as the world’s biggest advertising agency, with combined revenues of $23bn.

The merger will bring together Publicis’ MSL Group and Publicis Consultants with an Omnicom PR stable that includes Fishburn Hedges, FleishmanHillard, Porter Novelli, Ketchum and Portland.

However, despite French group Publicis stating the deal would create ‘significant value for shareholders’, with expected synergies of £325m, one M&A expert expected advertising to take the initial brunt of savings.

Rupert Ashe, director of D5 Capital, said that PR’s position ‘further down the food chain’ would help it.

‘Any savings are likely to focus on the bigger advertising end of the spectrum, and it’s unlikely they will want to start mixing the major PR brands within the groups early on.’

The new group will be jointly led by John Wren, CEO of US-based Omnicom, and Maurice Lévy, CEO of Publicis, as co-CEOs.

It has been reported that between them, Publicis – which includes Saatchi & Saatchi – and Omnicom control 41 per cent of global advertising spend.  

Despite anticipating WPP would respond, naming Havas and Interpublic as likely targets, Ashe predicted that the major deal would be lead to a ‘pause for breath’ in M&A activity across the PR market in the short term.

Trevor Morris, University of Westminster visiting professor of PR and former CEO of Chime Group, agreed.

He said: ‘This major deal does mean there will be fewer moves in the short term to buy emerging firms, which could depress prices.’

However, Lansons Communications founder Tony Langham claimed that PR agencies were not necessarily safe from cost-cutting.

‘There will be a lot of nervous senior UK PR folk this morning as rationalisation at senior level is inevitable,’ he warned.

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus

Latest Articles

John Lewis to tell brand story with "tasteful" 150th anniversary celebrations

John Lewis to tell brand story with "tasteful" 150th anniversary celebrations

Department store John Lewis is to use its 150th anniversary this year to talk about its history, which "not enough people know about", according to director of communications Peter Cross.

Labour hires Obama election strategist David Axelrod to fight General Election

Labour hires Obama election strategist David Axelrod to fight General Election

The man who helped Barack Obama win the 2008 and 2012 US presidential elections is to work for Labour along with members of his team.

Sky adds Fever PR to its roster after splitting with Cake

Sky adds Fever PR to its roster after splitting with Cake

Pay-TV giant Sky has added Fever PR to its agency line-up for a wide-ranging brief covering products and services.

Max Clifford trial jury to continue deliberations after Easter break

Max Clifford trial jury to continue deliberations after Easter break

The jury in the trial of celebrity publicist Max Clifford has been sent home for Easter and will reconvene on Tuesday for further deliberations about its verdicts on 11 charges of indecent assault.

Home Office brings in Munro & Forster to campaign against FGM

Home Office brings in Munro & Forster to campaign against FGM

The Home Office has tasked Munro & Forster (M&F) with supporting its campaign to eradicate female genital mutilation (FGM) as part of a wider retained brief.