This Media Buying Briefing covers the current in company news and media purchasing for Digiday+ members and is dispersed over e-mail every Monday at 10 a.m. ET. More from the series →
What a month last week was? Omnicom’s proposed $30 billion stock acquisition of competing holding business Interpublic Group captured a whole market by surprise when the news broke in a report in the Wall Street Journal on Sunday, Dec. 8, tossing the whole journalism world that covers media and marketing into paroxysms of limitless protection– regardless of the reality that this proposed mega-deal isn’t anticipated to close till Fall 2025.
Today’s rundown is an effort to take the long view, both of what’s occurred, and what might yet take place, favorable or unfavorable. What appears clear from the 10,000-foot viewpoint is that there are 2 basic schools of believed around the acquisition, which would rise Omnicom to the No. 1 position amongst the holdcos, from its existing perch at No. 3.
One holds that scale is vital, which Omnicom was almost required to do this offer (and discovered the best holdco to purchase, provided IPG’s obstacles of late) in order to stand firm. And supremacy in the U.S. market is vital to future success, offered how well the U.S. has actually weathered financial fallout from the pandemic, and wants to end up being a more decontrolled market with a brand-new administration taking control of the White House.
“It’s the capability to be the clear leader in U.S. media billings, plain and basic,” argued one executive with understanding of IPG’s business relocations. “Publicis has actually had a wonderful number of years, WPP has actually been the long time leader. Everyone’s done much better than IPG, for a range of factors. For comparable factors, any person would desire to have IPG’s strength in the U.S.”
The other state of mind holds that Omnicom is chasing after fool’s gold, due to the fact that scale will not matter in an age where AI and tech are the terrific equalizers. “The world they’re fixing for is a vintage,” quipped one senior company officer outside both holding business who spoke on condition of privacy.
Whichever school of idea you register for, let’s take a look at this offer from 2 other perspectives: What occurs if the offer goes through; and what occurs if the offer craters. And because it’s culturally important that any union be provided a mashup name, I’m choosing the one I choose– OmniPublic– instead of what was composed typically recently– OmniPG.
What occurs if the offer goes through
Many bets have Omnicom managing this acquisition, supplied its share cost remains healthy (it moved all week however was climbing up back up by midday Friday). As one expert near to Omnicom CEO John Wren put it, “There is no chance he’s going to stop working a 2nd time. This is a safe bet.” The expert is describing the unsuccessful effort to combine Omnicom with Publicis– proposed in 2013 and scuttled a year later on.
