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What Does the Publicis/Omnicom Merger Mean?

We’ve all heard enough about this weekend’s Publicis/Omnicom merger to know that it’s too big for our limited minds to even fathom, much less evaluate.

So many questions followed: will it lead to mass layoffs or protracted battles over antitrust laws? Will it doom boutique agencies that don’t get picked up by major “holding company” conglomerates? Will it change our jobs in profound and permanent ways?

These are all valid, fascinating issues that must be considered—and for now we’ll let other people do the thinking for us, starting with those smartasses at The Onion.

Surprisingly accurate! That headline stings a bit, though we finally understand why they didn’t hire us for the grad school internship we wanted so badly (should’ve learned to code in high school, dammit). On a more serious note, Richard Edelman is skeptical of this supposed sea change, writing:

Bigger does not mean better. My 84-year-old mother’s first reaction yesterday was that this reminds her of AOL’s* merger with Time Warner. “They were all screwed up for years,” she said.

In other words, don’t freak out…at least not yet. But there will be blood.

Edelman mentions the layoffs neither company claims to have planned, and downsizing is also the number one negative listed in Business Insider‘s “Five Downsides” post. Both authors are convinced that shareholders will force the newly formed Publicis Omnicom Group to fire people in the name of those classic bad guys, “efficiency” and “profit margins.” And while the merger is a big deal for the industry, it won’t make those shareholders any richer, because the companies’ incomes will stay the same.

Their bottom lines might even shrink due to the competition issue. Several British companies believe that this move will eliminate or minimize clients’ ability to choose between different agencies, and Edelman predicts that more media companies will try to bypass them altogether in the future by going directly to clients and throwing the traditional order out of alignment. Some big brands might even leave the POG due to conflicts with rivals (Pepsi vs. Coca-Cola, Verizon vs. AT&T, etc.).

To put it simply, the economics of this merger are not yet clear—and neither are the implications for brands and their competitors.

In the next post, we’ll consider the role that PR will play in this new and delicate dance. Stay tuned.

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