Agency leaders have their say on consequences of Omnicom-IPG deal

David Jones, CEO & co-founder, The Brand Tech Group: “This isn’t a surprise as consolidation was expected, and it makes huge sense in the short term. Both have been having their lunch eaten by Publicis, and IPG declined last year in organic growth. This gives both of them a story for their shareholders, gives the merged company the ability to carry out financial re-engineering and restatements that will help the numbers look better in the short term (the press release already says they’ve identified $750m – and Omnicom has been the smartest hold co at using free cash flow historically to drive returns.) Net takes the pressure off and gives them an equity story for the next 18 months to two years.

“In the medium to longer term, it’s unlikely to work. It creates the world’s largest company in yesterday’s industry. Everything is possible in the world of business and it might work, but putting two big declining legacy companies together is unlikely to lead to one high-growth AI-first market leader. It’s a bit like going back in time and thinking that merging Kodak and Blockbuster together would lead to the world’s #1 internet or social media company – this makes them much bigger in the legacy and traditional disciplines where you want to be smaller. They are increasing their exposure to the part of the business that is going to be the most disrupted!”

Dr. Peter Figge, CEO, Jung von Matt Group: "The merger primarily follows a stock-market-driven logic focused on growth. Such a consolidation enables rapid and substantial expansion but also brings challenges. For employees, this often leads to uncertainty, as companies typically seek synergies and efficiency improvements. In the initial phase, the organization will be preoccupied with internal processes and structures. This will divert attention away from client needs. For client, the merger often results in a reduced range of choices. Some agency partners will disappear forever. However, this also presents an opportunity for independent agencies that distinguish themselves through maximum customer orientation, specialized products, and strong innovative capabilities. These agencies can fill the gap and position themselves as reliable alternatives."

Donna Sharp, managing director, MediaLink: “The thesis for this merger can’t just be scale: the market has already shown how it values scale alone (it doesn’t). Clients no longer see scale as a differentiator and sometimes see it as a hindrance (complex, slow-moving). I expect to see the focus from Omni-IPG on truly market-making assets such as super-charging Omnicom’s already compelling production offering with Axciom data and bringing a focus on powerful full-funnel content to retail media with the power of IPG’s creative agencies and Flywheel. If done right, the focus on combining the competitive assets within each group will be far more important than central team synergy.

“In terms of opportunities for other agency groups, we expect a lot of last-minute flights to be booked for CES and all agencies look to protect or poach client relationships at the next major industry convening. There will be consolidation. Omnicom has already been on a journey to further integrate its agencies, especially in media. IPG has already been proactively streamlining its agency holdings by separating from potentially less competitive or easy-to-integrate assets. We have likely not seen the last of those actions in anticipation of the larger merger.”

Ian Millner, chair and co-founder, Iris: “I think it’s a smart move and likely the beginning of a broader consolidation trend in our industry. While creating scale can be beneficial, it doesn’t automatically translate into better outcomes for clients or talent. Clients aren’t assuming that bigger means better. The Publicis story offers a valuable lesson for the major networks: they need to invest in areas where they can add unique value that clients can’t achieve on their own, focusing on originality and innovation. Success comes from leveraging the best aspects of the network –whether through culture, talent, cost efficiencies, or technology – while building a truly client-centric model. Crucially, they must also work to minimize costs that don’t directly benefit clients.”

Joe Maglio, CEO of McKinney and Barbarian & president of Cheil North America: “The merger itself won’t matter much for clients or the people who work there until they start shuttering or merging agency brands. And then we will see agency consolidation. I wouldn’t be surprised if they take a page out of WPP and VML’s book. But until you get agency brands merging, this won’t matter much to the average client. Taking out shareholder value, as that’s an end result, there are really two reasons to do something like this at this scale.

“The first piece is combining data and technology. At some point, whoever has more line of sight into more of the data is going to start to push other people out. Having broader ownership of consumer data and technology solutions against that data is a longer-term benefit that will be more applicable to clients.

“The second piece is cost cutting – when you get to a certain size, if you’re struggling with profitability, you either have to get smaller or you have to get so much bigger that there are material inefficiencies that you can cut. That’s where you start to get the byproduct of maximizing share price because you’re suddenly cutting so much money out of the system that it immediately makes you more profitable. That’s the short-term benefit.

“From a conflict standpoint, conflicts are actually detrimental for clients for two reasons – a) You want people who understand the industry. b) You want anonymized customer data to be applied to your business, and the more there is, the more relevant and helpful it will be. Conflicts are counterproductive for the clients’ business.”

Chris Woodward, CEO, CTI Digital: “Consolidation, growing economies of scale and simplifying the offering to clients are the outcomes this deal will generate. It’s good news for the industry and it’s good news for clients. It also shows ambition and confidence, and that’s what the industry needs right now in a tough market. As for Publicis, I think this is good for them too. They’ve performed strongly over recent years under Arthur’s leadership and some extra competition will just push them to elevate their performance.”

Tom Stone, co-founder of re:act: “Another day, another marketing merger – and the stakes are high. Clients may bear the brunt, facing cross-selling of services that don’t align with their strategic needs. It’s a classic pitfall of consolidation: bigger conglomerates, diluted creativity, and a potential hit to client output. Culturally, this is a moment of upheaval. While there’s promise in cross-category learning and shared expertise, the risk of redundancies looms, with agencies competing in similar spaces likely to be offloaded. For staff, uncertainty will dominate, with questions of consolidation and streamlining hanging overhead. For Publicis, newly crowned as the largest holding company, this news will sting – it’s a clear challenge to their dominance. But in disruption lies opportunity: for independent agencies and other groups, this is a chance to step in, offer clarity, and reinforce their client-first ethos. The industry’s next moves will define the winners – and losers – of this deal.”

Kern Schireson, CEO & chairman, Known: “Our legacy competitors have been in need of radical restructuring for a while now. It’s not uncommon that those kinds of ground-up reinventions require a catalyzing event that opens the door to the kind of bold thinking and wholesale changes that need to get made. Hopefully, in success, this helps a combined Omnicom and IPG reassemble and realign the services they deliver into something that meets the needs of where the market is today...and where it’s going.”

Tim Ringel, CEO, Meet The People: “As OMG would become the single biggest agency holding company in market and restructuring will be the name of the game, two main opportunities arise from this merger for smaller and more nimble groups. 1.) Talent will not want to be part of the merger if they have a choice – we will see attrition of very talented individuals who simply have no home/future in the group 2.) Certain clients will become too small for a merged OMG/IPG and this allows for smaller groups to snatch them away when people and P&Ls are being merged.

“In terms of how people will be feeling at Omnicom and IPG, uncertainty will be the main feeling, as every merger of listed companies comes with a cost efficiency goal. They will feel it first and most likely even before regulatory approval, before bonus season end of Q1 2025. I think short-term Publicis will celebrate as they will know that the merged group will be very distracted for 12-24 months. After that Publicis will finally get real competition again when it comes to billion-dollar pitches. Nevertheless, it will leave a vacuum that new generation groups like Stagwell, Next15, Meet The People and many others can take advantage of.”

Sean McDonald, chief strategy officer, Rethink: “The focus on efficiency will be at the expense of the people, culture and creativity that built these brands. The continued consolidation has me worried about the strength of other agency brands, less about the strength of the agency. In terms of the opportunities, it will offer agencies like Rethink an opportunity to rethink the future of our industry. We see the continued consolidation in the industry as a race to the bottom. What we really need is more independent shops. There’s a reason that the most highly awarded agencies are also independent. Independence allows for flexibility and humanity where a model dependent on monthly reporting, quarterly earnings, network carrying costs, 20% margins, and hourly rates just can’t provide. We need to see a fundamental shift in focus from efficiencies and margins to people and creativity.”

Jon Goulding, CEO, Atomic London: “Given the inevitable cost-saving agenda and issues with back-end integration, I expect the impact on most agencies to be mainly behind closed doors. Any agency group struggling within a network doesn’t need a big deal like this to consolidate its brands, so it’s either happened or happening already. Besides, owning more agency brands pitching in each market will always improve the odds of a win. The big opportunities will come from how successfully the group now leverages its scale and cash investment to win the race for data-led transformation and AI disruption.

“There will always be some overlap but big groups are masters of managing any conflict. It’s the big global rosters where procurement will want to maintain buying control but with a drive for global cost savings, consolidation can carry more benefits than separation. However, Pepsi and Coca-Cola could be an interesting conversation. Offloading agencies tends to be an intra-network issue to manage. But there will likely be a move to re-organize some IPG brands under the centers of excellence such as Omnicom’s Precision Marketing Group and central Omnicom Media Group consolidation.”

Chris George, president, Sovrn: “Certainly, other agency groups are going to be looking through the combined entity’s client roster to see where there are conflicts and will be aggressively trying to win over those advertisers. The combined entity will need to protect their relationships with the category leaders, which may open the door for agency reviews among others in the category. I’m sure the staff is concerned because these types of announcements are typically followed by restructuring to cut costs. What makes it different this go around is the threat of AI which can no doubt be used to help agencies operate more efficiently. When big holding companies merge, you typically see some agencies either fold or spun out so I’d expect that to be the case here. It is tough to know which ones, but certainly there are overlaps in their media agencies, creative services, and in specialized agencies such as PR.”

Ed Fletcher, co-managing director, Shape History: “This new supergroup has both a huge opportunity, but also poses an existential threat. Omnicom and IPG both made it to the top of Clean Creatives’ ‘F-List’ this year for their ongoing work with fossil fuel clients, even while pushing their ‘sustainable’ offerings and incentives. Combined, they now hold 124 fossil fuel contracts, more than any other holding group in the world. This means they have the potential power to put a massive dent in the fossil fuel industry by dumping just one of these clients. Equally, there’s also a real threat that the combination and coordination of these organizations could facilitate an even greater regressive movement.

“Omnicom talks a big game about ethical conduct, and IPG prides itself on values like integrity and responsibility. But when you say one thing and do another, trust takes a hit. It feels almost inevitable that this merger is only going to proliferate the fossil fuel industry, something that a growing majority of staff and clients want to be a part of. But just imagine if this new super group took a stand. For their staff, clients and consumers. It would be a true sum of their parts and an unbelievable manifestation of trust and integrity.”