Craig Le Grice, chief innovation officer for Blue Rubicon, who has worked as a supplier to Omnicom, global digital leader for WPP, consultant to Publicis, and recently left Aegis where he was global technology officer, highlights his concerns at the formation of Publicis Omnicom Group.
I'm deeply concerned about the Publicis / Omnicom merger.
First there's the duopoly the merged entity will create - creating a sector essentially owned by two holding companies in WPP and whatever the new Publicis / Omnicom group will be called. Even with other players such as IPG, Dentsu, Havas etc, all other players will be small fry compared to $16bn and $25bn in revenues respectively. How much competition does this create? In markets like the US, specifically, how much trust can there be with such a duopoly?
I am unsure that major clients like Procter & Gamble (etc) want to have to choose between just two holding companies for their billion dollar annual spends. Even if they do, the lack of competition will reduce the need to genuinely create stand out work - which is a blow for strategy and creative.
Which makes for a strong second concern too - competitive conflict. Perhaps the largest conflict with the merger is Pepsi / Coca-Cola. How will that be handled? Those of us that have been in large agency groups know how weak conflict preparation and defence can be across same-group-owned companies, let alone two merging giants. Whilst it's fair to acknowledge that clients have been reducing focus on conflict situations, I'd certainly suggest that this is a trend associated with the slow commoditisation of the industry. It still doesn't happen in parallel professional services firms like management consulting. Does not focusing on conflict suggest we agree that all thinking in advertising is less strategic and business-critical?
Thirdly - and on a wider scale - the business of building and selling an agency will continue to be focused entirely on creating a company that can slot in to a major holding company via acquisition. I've been worried for a few years now that true entrepreneurialism is dying in the industry. Where is the incentive to grow and build a business to compete with the biggest when the biggest are so gargantuan that there's no chance you'll ever catch up? The David and Goliath story is nostalgic but it's fiction for a reason.
Further, where are all of the creatives and strategists? Scouring the new (rumoured) leadership team for the merged entity, why on earth are there so many accountants and so few practitioners? When I was excited about getting in to the industry, it was led by creative and strategic visionaries - building companies with their names above the door. I worry we've arrived at a place where consolidation is being driven solely by men (have a look - you'll struggle to spot many women - or varying skin tones for that matter) with cold hard numbers in their blood instead of a passion for creating outstanding work and driving real change for clients and their brands.
We can only hope that this news spurs on the independent space. Many clients will still seek the 'one network, one invoice' model. And that's fine. But, faced with almost zero choice in global holding companies, perhaps some will revert to working with the best - not simply the networked. Taking a true 'glocal' approach would provide opportunities for local and regional heroes in the new battlefield that will have just two (warring) commanders.