Merger set to propel Publicis Omnicom Group to Australia’s top spending media buying point
Global agency holding groups Omnicom and Publicis are to merge in a move which would take the separate operations from Australia’s third and fourth biggest media buying points to the largest.
The move to create Publicis Omnicom Group was announced on Sunday night, Australian time. At a global level, Omnicom CEO John Wren and Publicis Groupe CEO Maurice Levy will initially be joint bosses. After two-and-a-half years Wren will be CEO and Levy chairman.
Omnicom’s media agencies OMD and PHD have an estimated spend on behalf of clients of nearly $1.5bn, while Publicis Group’s Starcom and ZO account for about $1.3bn.
The combined spend of about $2.8bn would put the new entity ahead of WPP’s Group M agencies of Mediacom, Mindshare, MEC and Maxus which together have an estimated spend of about $2bn.
(It should be noted that numbers vary depending which methodology is used – RECMA estimates as used above tend to be higher than Nielsen’s annual agency billings which are unable to account for digital spend.)
Meanwhile, the deal would push Dentsu – which includes Mitchells, Vizeum and Carat and accounts for about $1.7bn – down to third.
Group trading is becoming an increasingly important part of the media buying dynamic. The last five years or so has seen agencies move from individual negotiations with media outlets to agreeing a group price based on volume of spend. The new arrangement will create a major upset of the pecking order, which currently sees WPP’s Group M agencies as the biggest gorilla, with Danny Bass about to take the helm from James Parkinson.
The deal could take six months to be finalised. Both companies also own a string of Australian agencies in the advertising, digital and PR sectors:
Advertising
- Omnicom – DDB, Clemenger BBDO, Whybin\TBWA
- Publicis – Saatchi & Saatchi, Publicis Mojo, Leo Burnett
Digital
- Omnicom – Tequila, Pro=ximity
- Publicis – VivaKi, Razorfish
PR
- Publicis – Reputation (affiliated)
- Omnicom – Fleishman-Hillard, Porter Novelli, Mango
Tim Burrowes founded Mumbrella in 2008. He worked on Mumbrella until 2021. At various points he was editor, content director and editor-at-large.
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Unbelievable merger! It will see this new group be almost unstoppable with some excellent brands in the market.
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Buying by the kilo or bulk deals have been part of media negotiations for way longer than 5 years – try almost 40 as most old timers will remember
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Hi Been There Done That,
Agreed – but more at the agency level than the holding group level.
Cheers,
Tim – Mumbrella
http://www.theonion.com/articl.....rge,33296/
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Actually Mumbo ‘been there done that’ is right.
Many holding groups have negotiated as groups for years. In fact the process was always 1. holding group negs 2. agency negs 3. by client. Now I’m not saying any of that was necessarily beneficial and it certainly wasn’t transparent…
As to the merger, I get it, but I’m not a fan. There’s only two reasons for this to happen and thats economies of (mass) scale and to keep as much revenue as possible under one big roof. Advertisers should consider how this benefits them in terms of delivering the most creative and effective solutions. For those who find the answers to that don’t suit them. a new wave of independent thinkers will emerge.
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