Omnicom Group’s acquisition of Interpublic Group (IPG) is set to create the world’s largest advertising group, prompting industry insiders to predict a wave of consolidation and elimination of legacy creative agency brands. The deal, announced on December 9, will see Omnicom absorbing IPG’s creative agencies, including McCann, FCB, Deutsch, and The Martin Agency.
Industry experts warn that the combined company may follow the pattern of rival holding companies by consolidating agency brands, leading to job losses in the advertising industry. However, they also believe that distinct brands and smaller shops are more likely to be protected.
Omnicom CEO John Wren has assured employees that their jobs are safer under the new structure, but consultants and former agency CEOs warn of potential friction and challenges in integrating the two companies. The merged entity is expected to save $750 million in costs within the first two years of closing.
Industry observers predict that the combined company will focus on capabilities rather than agency names, with smaller shops being more likely to be protected. Agencies such as McCann and The Martin Agency are seen as having distinct brands that can offer different capabilities.
However, consolidation is not without its downsides, including potential client conflict and talent drain. Independent agencies may benefit from the merger, but ultimately, it’s up to agencies within both networks to prove their value and distinctiveness in order to avoid consolidation.
Source: https://www.adweek.com/agencies/the-creative-agencies-that-will-be-priorities-in-the-omnicom-ipg-merger