We are not yet 24 hours into the “big news” that ad giants Publicis and Omnicom have decided to merge forces to become the biggest giant behemoth of an agency holding company. I’ve been reading the blogs, the press, and the pundits for their immediate reactions. I have yet to find the “this is a good thing” sentiment for us as consumers.
First, let’s just knock down the foam a little. Most people in this world have no idea what Publicis or Omnicom are. I bet even within the rank and file of most agencies, no one knows who they are. On one hand, in the world of advertising, this is rather like Coke and Pepsi merging. (Which, in the case of Publicis and Omnicom is actually true: Each has one of those brands.) On the other, this is still just the world of sugar water. To most people, the brand of soft drink they consume doesn’t have much of an impact on the quality of their daily lives. (Of course, the Publicises and Omnicoms of the world will beg to differ, arguing that your brand affinities are the most important things in your life.)
What I’m struck with is the diabolical truth around what this merger will actually do in reality. Sure, the joint body will combine 130,000 people with various talents to create the world’s greatest advertising corporation. (For a counter argument, there’s The Onion’s take.) Yet, when you read the financial press, the merger is really all about negotiating power to suck the living daylights out of the price of advertising through Goliath-like purchasing power.
So, let me get this right. On the one hand (for those of you keeping score, we’re now on hand three), we have a company with a profound desire to combine creative forces to add value to advertising. On the other, we have teams of people working side by side to completely devalue the price of the consumer through intense ad-rate negotiating power.
This dynamic is going to cause additional Sybil-inducing personality disorders within the culture of Publicis Omnicom.
The argument for “going big” is to allow the agencies to compete against tech companies like Google. To me, that misses the point entirely. The reason Google is taking home the bacon is its transparent ad model: Advertisers get what they pay for—a site visitor. Even the best of the ad-targeting and automated-purchasing technologies that the large agencies clamor upon suffer endlessly with transparency and attribution models. The Publicis-Omnicom merger only exacerbates this growing tumor on the industry.
Thusly, the ad industry is not well-associated with making incredible bets on technology over the past 10 or 20 years. Many agencies continue to struggle with integrating digital into their culture and media flow. In fact, in many firms, digital has no more nuance or uniqueness than print impressions. And, yes, some of these firms are under the family crest of Publicis Omnicom. With its combined negotiating power, my expectation is that the ad technologies that win as a result of wooing Publicis Omnicom (and the other guys at WPP) will be those that benefit brands and agencies, not consumers.
And that’s a shame. Making agencies win isn’t what begets incredible technology. The skull-knocking technologies of the past decade have all been those that disrupted traditional business models. Think the record industry and the iPod. Think GPS apps versus, well, Garmin. The challenge for long-term relevancy for any advertising firm (mine included) is to look beyond short-term opportunities to squeeze the water from the rock toward the long-term burning desires of the consumer to be satisfied and wowed. The ad industry has a woeful modern track record of doing so. Making ad firms bigger isn’t the answer.