Omnicom-Publicis merger will give India its second largest advertising network
The Wall Street Journal reports that Omnicom and PublicisGroupe have agreed to merge.
The Wall Street Journal reports thatOmnicom and PublicisGroupe have agreed to merge. Business Insider says:
"Omnicom OMC and PublicisGroupe SA, the world's second- and third-biggest advertising companies, have agreed to merge, creating what would be a $35 billion behemoth, people familiar with the situation said.
The boards of both companies have approved the deal, the people said, which is expected to be announced Sunday in Paris, where Publicis is based. Publicis scheduled a news conference for 2 p.m. on Sunday for a "major corporate announcement."
In India, the pecking order is different, with holding companies WPP and IPG well ahead of PublicisGroupe and late India entrant Omnicom. With the merger, though it is impossible to get the India specific numbers, I would hazard that the merged entity would pip IPG to the number two spot, behind WPP.
The India assets of the Publicis-Omnicom combine would include Publicis India, Publicis Capital, Publicis Ambience, Saatchi & Saatchi, Leo Burnett, BBH India, StarcomMediaVest, Zenith Optimedia, Vivaki, TBWA, RK Swamy BBDO, DDB Mudra, BBDO India, Mudra Max, OMD and Proximity.
Publicis, in India, has been on an aggressive mood, bringing in Bobby Pawar from JWT to oversee the entire group's creative product, and ParthaSinha from BBH India to oversee strategic planning. There are at least two advertising agency acquisitions that are in the pipeline; announcements will be made shortly.
Some commentators and industry watchers have suggested that conflicts in the merged entity, especially handling both Coke and Pepsi, will pose some problems. Management of conflicting accounts within a group is now common - as long as the accounts are managed by different agencies within the group, so the problem is not, to my mind, of great consequence.
What will be interesting to watch is how the 'group' manifests itself in India, with starkly different cultures and identities (and financial performances) in the individual agency brands. We will certainly see an India head for the new group, with a far more difficult task than RanjanKapoor (who heads WPP in India) and KekiDadiseth (who oversees Omnicom assets in India) have. Unless group assets are integrated, the advantages of scale of the mergers will not be leveraged. With the low-margin business that advertising has now become, creating group efficiencies will become a focus area for the team tasked with overseeing the merger.
In a few hours, details of the merger and the impact will come in, and we will have a better sense of the fine print.
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