When opposites attract: how the Publicis-Omnicom merger might spread start up fever

By Lewis Blackwell |

August 1, 2013 | 6 min read

On the face of it, the Publicis and Omnicom plan to form the largest ad conglomerate in the known universe might indicate that the world of hot creative shops and maverick agencies is increasingly a thing of the past for adland.

Will only giants survive in the post Publicis-Omnicom age?

And then again, no. History suggests this is the time for start-ups, the more creative and differentiated, the better.

Yes, the big talk is how this deal reflects that the world is ever more about managing and controlling big data, with mighty colossi throwing their big weight around in big media-buying negotiations. It is tempting to think only giants survive in an oligopolistic world where multinational agencies square-up to multinational media and tech corps on behalf of multinational clients.

The cynic would see the small agency under threat like never before. It would seem to be a world where it is less the quality of the creative ideas in advertising and instead the systems and the accountants, along with the inertia and fears of their clients, that drives the industry. Only the crumbs of minor accounts or marginal pieces of big brand activity fall off the giants' table for the little guys scrabbling in the dirt. In this grim future, the small agencies have to eat each other alive, cutting costs to service small clients, nursing them along so that when something decent develops the big agencies can gobble them up.

But pessimism, or even cool rational assessment, is not the spirit for building a new business. Launching a new enterprise calls for self-belief, unshakeable optimism, gimlet-eyed focus that only tolerates success. It also comes with an agility and can-do mentality that is easily lost in large corporations. And in the creative industries, entrepreneurialism is especially fuelled by many a maverick who wants to get out from the big corp and show they can create something different.

With the start-up mindset, the latest mega-merger becomes a challenge and an opportunity for new enterprise. I take heart from comments made by Sir Martin Sorrell on hearing of the Publicis-Omnicom deal. While admiring the merger-makers' ambition, he predicts many an obstacle to making it happen and plenty of fall-out if it does. Talent and clients will be there for the taking.

While he does represent the soon-to-be deposed market-leading monster, WPP, Sorrell has never lost the edge of being a super-focused visionary of change. He started WPP by taking a shopping trolley maker and using it as a vehicle to roll-up agencies galore, delivering new economies of scale, new networking, along with improved business practices. He's still doing it nearly 30 years later. He sees there is fresh opportunity in this new proposed merger – as do those buyers who have improved the WPP share price in recent days.

There will be both a forced and voluntary exit of very smart and ambitious people from Publicis and Omnicom if this deal goes through. The forced exit will be because headcount cuts will be needed to achieve $500m of proposed savings. More dangerously, and interestingly, the voluntary exit will see top Omnicom and Publicis talent getting in the lift, heading out of the door... and finding their disrupted work-life serves as an invitation to go elsewhere. Faced with uncertainty and stress at home, they might be interested in a position at WPP, for example, or just keen to pick off a client and service them from a new business altogether. Having this deal forced on them could be the motivation and opportunity to do something different. Given the scale of enterprises merging, this should trigger a global reaction.

Macro-economics might also support this sense of a peak season for start-ups being upon us. If economic indicators of slight upturn ripen into recovery, this could be the time to hoist a sail on your own boat and catch the wind of change. (Apologies for something approaching a mixed metaphor – it is kind of appropriate, as those who take this route may one day be able to eat the fruits of their labours on their yachts.)

I recall as a journalist in short trousers, roughly about the time I found myself talking to the sparky new boss of a wire and plastic product company, meeting with the team that was to launch innovative agency HHCL. Four guys left great jobs and big salaries in good agencies in order to buy a bus pass and get busy. They then built the 'agency of the decade' in the 1990s and ultimately sold out and saw their names disappear into... WPP. Along the way their creativity and chutzpah helped launch several innovative businesses, including First Direct and Ocado.

Never mind mega-mergers and big data. The big opportunity for most of us is still to collaborate at a smaller scale. The greater innovation remains where the giants started – remember Google, Twitter, etc. are all relatively recent. Everything starts small but thinking big is what is needed. For the agency sector, the future will bring many a new small business doing something remarkable with other small to middle-sized businesses. It will involve the more innovative large clients breaking rank to hire a small hotshop and in the process transform them. Let's be clear – many a client is wary of the scale, power and cost-structures of the largest agencies. Almost always the aggregation in one area of an industry generates pressure for change elsewhere, and new fast-growth opportunities for investors and new acquisition targets for those giants (who, almost always, at some point, begin to fragment again).

This is the time for a wave of creative start-ups – and this industry is still a good one to be doing it in. Relatively modest start-up capital is needed, big ideas and great relationships are what the future can be made from. There's millions in funds out there looking for small businesses to invest in... now is the time to get going.

So, is this you, or somebody you know? In five years, you might be considering selling your baby to a giant, but for now keep the focus on how you have better ideas than anybody else and that the world really needs you in a pure form, undiluted by big corporate nonsense. That's the spirit! Go for it!


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