Do agency mergers only kill creativity and drive talent to the competition?

The Publicis-Omnicom merger will inevitably lead to some talented staffers leaving for what they see as greener pastures.

Yes

Lane Bailey, CEO and founder, Advocom Group
More than 20 years of Capitol Hill experience and more than a decade in the agency sector

The Publicis-Omnicom merger is no surprise to those of us who have worked for multinational communications holding companies. It is simply the evolution of our profession.

This merger, of course, will likely be a catalyst for others. Not because clients will demand it, but because investors – incorrectly – attach greater value to size and reach in advertising and PR, thinking that these things drive the most important measure – profit. It's a case of Wall Street not understanding that it is talent and creativity, not size, that drives our industry.

For more than 13 years, I helped manage parts of acquisitions within Interpublic Group in Washington, DC, at Weber McGinn, then GolinHarris. I took great pride in my efforts to integrate offerings and people across brands and to convince clients that the bigger and more connected we were, the better our ideas would be and the more successful our execution.

In my time spent in the business, I have observed a consistent cycle that is part of every M&A in our sector.

In order to achieve the $500 million in efficiencies projected in the Publicis-Omnicom merger and to meet the Street's revenue and profit expectations, the new company will roll out a “shared services” model internally, combining functions such as HR and finance, and merge offices and teams globally.

It will navigate conflicts easily at first but face a greater challenge later as clients begin looking for agencies that want monogamous relationships. 

Innovation will be sacrificed. Creativity will be the first victim because the people who innovate now will be busy integrating. The company will also encounter staff and creative turnover, leaving in frustration and disappointment, and say goodbye to senior managers, while executives in both companies get rich from earnouts.

Ultimately the merger will disappoint investors.

Clients are calling for creativity, attention, value, and consistency. It's very hard to deliver these things from a $35.1 billion enterprise striving to meet the expectations of an uninformed, unforgiving Street

No

Anthea Hoyle, SVP, Ogilvy Impact
More than 13 years of agency experience; works within Ogilvy's employee-engagement and comms consultancy

Mergers of any kind can create uncertainty inside organizations and, if not managed correctly, can lead to issues across the entire business.

Agencies are particularly difficult to merge since its products are the output of its people's hearts and minds. Their creativity is the foundation of a firm's identity.

Not only can mergers be done – they can be done well. Many can result in the overall improvement of agency performance in addition to an increase in the satisfaction of talent and clients.

Every merger is unique. Each path forward will not be the same, but things that remain consistent are:

  • Respect the original entities. Acknowledge how employees will feel about the change – have open and honest conversations. No one likes change, especially when it feels forced.

  • Define a clear vision for the new agency. Help employees understand the reasons for the merger and outline how their own careers will improve.

  • Establish a desired culture. Be clear on the right talent. As you bring two cultures together you need to appreciate their differences and strengths as this is what made these firms successful in the first place.

  • Continue to listen to staff. Your employees are the ones delivering the work for clients. They are in the trenches each day working through the repercussions of decisions made by management. Listen to them.

  • Keep communicating. Many leaders underestimate how important internal communication is in times of change. The key to a successful merger is for leaders to communicate clearly from the start, demonstrate the way forward, and keep communicating to staffers.

It is crucial for merging firms to put potential into practice. Only then will a new company reap greater financial returns, not because two P&Ls have combined, but because it has nurtured a thriving culture, inspired greater creativity, retained top talent, and through that, built a stronger reputation.


PRWeek's View
The Publicis-Omnicom merger will inevitably lead to some talented staffers leaving for what they see as greener pastures. To cut the $500 million their CEOs promised, leaders will find it tough to keep the culture and creativity strong.

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