Omnicom Publicis Merger: It's About Staying Competitive

Added on by Arturo Gutierrez.

The role of the CMO continues to become increasingly complicated. Just consider what marketing has become. It's comprised of channels unseen prior to the previous decade (mobile, social), traditional channels becoming obsolete, media and programming only seen on television now being created and distributed online, and advanced analytics providing insights and intelligence to drive agile strategies. Within this context the CMO lives, and he/she needs help.  

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On the other side of the equation are the agencies and contractors tasked with some of these evolving aspects of marketing. And they need to stay competitive in a landscape that is seeing content, data, management consultancy, and technology merge. That is why this merger is so important and telling of what I think will be a very exciting next 5 years. Traditional ad agencies will need to innovate or they will die because they will not be able to offer our CMOs the value they need. For years now they have tried to create an offering that includes analytics, for example, as a core competency for clients. It hasn't necessarily worked out if you consider who is still getting those contracts: the Accentures and Booz Allens of the world. Also, how many ad agencies can you point to that are offering great analytics or have developed the offering in house? So if you can't built out a great offering in house you should go and acquire it.

Publicis isn't exactly known for media and Omnicom doesn't exactly have digital and analytics capabilities which Razorfish (Publicis), the digital shop that created it's own product called FLUENT (with Adobe), has developed (one of few agencies to do so). To me, this is smart merger, although a risky one. Smart because Omnicom doesn't have the digital assets Publicis has (Digitas, LBi, Razorfish) and Publicis can tap into the large client base and learnings of Omnicom's media knowledge. 

The truth is, smart merger or not, what other choice do they have if they cannot innovate on their own? Ad agencies are begining to feel pressure form management consulting firms that can offer market intelligence and are begining to step into marketing related roles of strategy and even content creation. I know several fortune 500s that are increasingly seeking the advice of Mckinsey and Bain on marketing. The CMO needs help, and the agencies that can offer a more complete package will stay relevant, the others will die off. 

This is an initial reaction. We haven't even began to talk about culture. And the merging of these two companies will be greated with challenges that many mergers that came before have experienced. 

 

 - arturo gutierrez