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What Does the Publicis/Omnicom Merger Mean for the Industry?

As one might imagine, the announcement (and Vine video) of the biggest merger in advertising history is causing quite a reaction from those in the industry. Above, Keith Hunt, managing partner of M&A consulting firm Results International, hypothesizes about the implications the newly formed Publicis Omnicom Group will have.

As Hunt notes, the merger means the company will be able to buy media very cheaply, leapfrogging WPP in the process. But, Hunt wonders, how far can you push down prices? At one point do vendors draw the line?

Also, Hunt says, there’s the issue of who’s in charge. Co-chief execs, John Wren (Omnicom) and Maurice Levy (Publicis)  are elder statesmen. Levy, the older of the two at 71, is now on the hot seat in terms of naming a successor, that is, if the balance of power between Publicis and Omnicom remains a priority. As WPP’s Martin Sorrell said in an interview today, “It’s a nil-premium merger — effectively a takeover of Publicis by Omnicom [without exchange of money].”

Finally, says Hunt, there’s the matter of positioning. It benefits the new company to frame the merger as one that hinges around new technologies and emerging markets, allowing Publicis Omnicom Group to compete against tech companies outside advertising agencies like Adobe. “Exciting times,” he adds before staring into the camera wistfully. It’s only the beginning.

Check out Wren and Levy bonding after the jump.


 

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