The planned merger is expected to challenge WPP’s current dominant position in the PR sector, not least on its home UK turf. Publicis Omnicom Group would own four of PRWeek’s top 20 PR consultancies, putting it on a level footing with global rival WPP.
Marcus Anselm, a partner at corporate finance advisory firm Clarity, believes the combination will allow Omnicom’s PR specialists to profit from the digital expertise that Publicis has invested in through acquisitions such as Razorfish and LBi.
‘The biggest advantage if you are within Omnicom is if they get the integration right, then over time all the digital capabilities that Publicis has bought, which Omnicom has not bought, could benefit all the different units within Omnicom,’ said Anselm.
The head of Omnicom global network Ketchum Rob Flaherty agreed that the digital disciplines of data and shared media were part of the rationale for the deal.
'Scale matters in the era of big data and content amplification, in paid media but also in the shared, owned and earned space. This is a big opportunity for us – both for Ketchum and the newly merged company.'
One Publicis-linked source noted that the merger would also fill a ‘hole’ in the French group’s PR offering, as it has traditionally been underweight in public and regulatory affairs.
Publicis was understood to have made a serious bid for Portland last year, but was outdone by Omnicom, which bought a majority in the agency to add to its PA stable including FleishmanHillard and Ketchum Pleon.
Conversely, Publicis has the stronger presence in the City PR market, where its Capital MSL brand has grown into a top ten player in the UK, suggesting potential synergies between the groups’ combined political and City PR offerings.
Some observers suggested that the merger raised questions about the future of Omnicom’s 47 per cent stake in financial shop Kreab Gavin Anderson. KGA was last year hit with a number of high-level defections and Publicis also owns the agency’s Scandinavian rival JKL.
However, the chairman of KGA’s majority shareholder Magnora, Peje Emilsson, told PRWeek that the deal would have no impact on the agency’s ownership.
Other senior UK figures at the groups’ respective agencies were still absorbing the weekend’s news.
‘The implications will take a long time to unwind, but the idea that this will lead to major upheaval is fanciful,’ said one Omnicom PR source.
A number of agency figures downplayed the likelihood of client conflict issues. However, Coca-Cola declined to comment on whether it would be comfortable remaining with MSL were Publicis Omnicom Group to clear all regulatory hurdles.
Coca-Cola split with Portland in 2012 after four years because the agency sold a majority stake to Omnicom, which works on a global level with PepsiCo.
A senior MSL source insisted: ‘Talk of major conflicts is bizarre while there is no talk of merging PR agencies.’
Others believe the meeting of the corporate cultures of the groups will be the real acid test.
Bell Pottinger chairman Lord Bell claimed the tie-up might bring scale, but ‘the Omnicom creative reputation is likely to suffer’.
One insider concluded: ‘There is no such thing as a merger of equals and I suspect the real power will end up with the Americans.’
UK fee income £25m
UK staff 227
Ownership Publicis Groupe
MSL Group houses all of Publicis’ PR shops, with offices in 22 countries and 89 countries in all including affiliates and partners. It was formed in 2009 when Publicis brought together its PR and events agencies into one global network.
Agencies combined included MS&L Worldwide, Publicis Consultants Worldwide, JKL, Capital MS&L and Publicis Events. MSL’s London office is led by CEO Kelly Walsh and clients include Siemens, Atos, Berkeley Group, Nestlé and UNESCO.
UK fee income £22m
UK staff 200
Ketchum has been part of Omnicom since 1996.It is a global network, with 74 offices and 56 affiliates in 70 countries. Its London office is led by Denise Kaufmann and its New York-based global chief is
Clients include IBM, Philips and FedEx. Ketchum’s core offering includes brand marketing, change management, corporate comms, food and nutrition, social and digital media, healthcare and technology.
UK fee income £14m
UK staff 127
Omnicom acquired London- based Fishburn Hedges in 1999, but beyond tentative designs on New York the agency is yet to develop into a network.
Fishburn Hedges Group CEO Simon Matthews is taking the reins of the main agency from Fiona Thorne this autumn, raising speculation of closer links with sister consumer PR shop 77. Fishburn Hedges has worked in the energy, retail, healthcare, technology and travel sectors for clients such as Shell, Nestlé and BT.
UK fee income £13m
UK staff 120
Founded in 1946 and part of Omnicom group since 1997, FleishmanHillard is active in 29 countries and is led globally by Dave Senay. Its London office was established in 1987 and is headed by MD Richard Kanareck (pictured).
FH’s offering spans consumer, healthcare, technology, corporate reputation and campaigning, public affairs, financial services, digital and social media, medical education, internal and crisis comms, sports and sustainability.
UK fee income £10m
UK staff 90
Ownership Majority Omnicom stake
Founded in 2001 by Tim Allan, public affairs and reputation management agency Portland sold a majority stake to Omnicom in 2012. Headquartered in London with offices in New York and Nairobi.
UK fee income £8m
UK staff 71
Launched in the US in 1972, the agency has offices in nearly 60 countries and its London office is led by Sally Ward.
Kreab Gavin Anderson
UK fee income £5.5m
UK staff 26
Ownership 47% Omnicom but majority owned by Magnora
Formed in 2009 by a merger between Sweden-based Kreab and US-based Gavin Anderson & Co. It has 25 offices worldwide and works in corporate communications, financial communications and public affairs. The London team is led by Gunilla Banér.
All fee income estimated due to Sarbanes-Oxley Act