Publicis’ Levy warns negotiating ad deals with Sky will get harder as takeover battle mounts

Maurice Levy has warned advertisers that deals with Sky may become more difficult

Publicis chairman Maurice Levy has warned advertisers that negotiating deals with Sky is about to become considerably harder as the bidding war for the broadcaster heats up.

Yesterday (27 February) US cable giant Comcast tabled a $31bn bid for the pan-European broadcaster.

It was a surprise offer given that Rupert Murdoch-owned 21st Century Fox had already agreed to pay $25.8bn for 61% stake in Sky, a bid that was itself complicated in December when Walt Disney confirmed it was looking to purchase the majority of 21st Century Fox, including its stake in Sky.

Speaking at Mobile World Congress today (28 February), Levy said the unprecedented consolidation of media outfits in the industry is part of a quest for scale to compete with tech giants like Facebook and Google for ad dollars, as well as Netflix and Amazon for global reach.

Levy warned that whatever the outcome, the only beneficiary will be “the Murdoch family” and that advertisers are going to have to get ready for some tough negotiations.

“Google, Facebook have redefined scale. And that is leading all players to redefine their own strategy; to get to a scale that will make them remain a key player,” he said.

“When you have [tech] companies where the value is $800bn – a size we’ve not seen since the inception of the economy – you have to acquire and merge to stay a size where you’re still a player.”

He said “the game” for advertisers and their agencies is “simple”. Brands want an audience and to address the message to the right audience, he said. They need “the lowest possible price for each audience” and “to make sure that audience is really looking at the ads”.

With this in mind, the “big guys” are going to make it so advertisers will have to pay.

“The fact that we have big guys in the game is making our job more complicated; it’s [already] tough to negotiate with those big players,” he said.

“Whoever acquires Sky, at the end of the day, it will not be an independent [company] and there will be change in the landscape. The player will be bigger; the stake will be bigger and the ability to negotiate will be harder.”

And he said these mega-companies “obviously want to set the highest price and buy at the lowest possible price”.

But even with these mega-mergers on the table, Levy was unconvinced of their ability to content with the growth of the duopoly for budgets.

“We can expect the growth of tech companies to continue. As it is today, the combination of Google and Facebook capture 72% of digital spend. Maybe we’ll get to 50% [one day] but they’ll still have the bulk of growth.”

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