News Analysis

Publicis-Omnicom merger collapse draws business as usual response

PR agency chiefs inside and outside what would have been Publicis Omnicom Group are getting on with business as usual after the merger's collapse.

by Daniel Farey-Jones / May 12, 2014

Rivals: Lord Bell was among rival agency heads who professed indifference at developments

The head of one agency that would have been part of POG claimed no plans that would have affected their work ever filtered down from the top of the two giant organisations during the protracted talks.

Speaking off the record, the agency head said the message from the top was now "this is not going ahead so please focus on your day jobs" and when they passed on the news to staff there were no questions.

"At grassroots level it hasn’t really affected anyone because it was something taking place so far up the food chain at holding company level."

Rival agency chiefs professed not to be disappointed that the deal was off, despite speculation that they had been looking forward to picking off dissatisfied clients from POG.

Bell Pottinger chairman Lord Bell said: "It’s very difficult to get terribly excited about something that hasn’t happened and isn’t going to happen."

"I’m completely indifferent," said GolinHarris international president Matt Neale. "It doesn’t affect GH’s strategy in any way."

However, Blue Rubicon chief innovation officer Craig Le Grice indicated he was pleased as the longer the big holding companies stay separate, the better the quality of the industry’s work should be.

"It provides more choice for clients who require a global network, more competition (which, I think, drives better work) and prevents total polarisation of the industry where just two listed companies – grown by accountants through acquisitions – become the Goliath to a large pool of Davids."

As we show below, agency mergers and acquisitions have far from stood still during the 10 months since Publicis and Omnicom announced their marriage plans.

Publicis Groupe has been more active than Omnicom, which is understandable given its comparative lack of PR resource. Omnicom owns many more agencies than the French group’s MSL, including international networks Ketchum, FleishmanHillard and Porter Novelli.

M&A adviser Jim Houghton, a partner at Results International, said that the two groups were heading in totally different directions.

"From an M&A perspective Publicis has been looking to grow as big and as fast as possible, with a view to doing more digital work in Asia, while Omnicom is not wired that way. Omnicom’s view of the world is to create massive shareholder value by delivering consistent quarterly growth and it doesn’t go aggressively after things in the same way."