About Hervé de Clerck

Hervé founded AdForum in 1999. He is also the initiator of ACT Responsible (Advertising Community Together), to show the social role of Advertising. Hervé worked in Marketing (Brand Mgr, Colgate Palmolive), Consumer Insights (MD, Synapse), Advertising (CEO, Benton & Bowles France), Management (COO, Lesieur), Media (MD, IP/Havas).
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Publicis/Omnicom Mega Merger : “Flying Pigs”?

 Publicis Press ConferenceAt the Press Conference Sunday, we heard the usual bla-bla that goes with the announcement : it is a merger of equals, John Wren and Maurice Lévy  became real friends, the cultures of the companies will be respected, the combined companies will have a more complete client offering, this will create opportunities for employees and value for the shareholders, etc…

 Dance with the Internet Giants
After over an hour, we finally heard the real reason: Size matters because we have to face Internet Giants. And it is not about media bargaining, it is more vital than this. Today, the Googles of this world have dramatically changed the rules of the game and the roles of the players. Big Data is competing with Big Idea. If the Agencies want to survive, they better take this into account: and it ain’t not cheap.
At this challenge, Publicis is the strongest and competes fiercely with WPP. Martin Sorrell was the first mover and deliberately ran a strategy of acquiring consumer research capabilities (Kantar, TNS, Millward Brown) under the assumption that consumer insight was the future. Maurice Levy quickly competed on the digital side aligning Digitas, Razorfish, Rosetta, Lbi in front of WPP’s 24/7, Possible and AKQA. During this 10 years competition, Omnicom has been very quiet. John’s Wren’strategy has been to let his creative networks integrate their own digital capabilities. With mixed successes: Integration of Tribal DDB, BBDO Chemistry are still to be completed as the culture of these networks are creative. So the merger creates opportunities for Omnicom to join the race.
Also, it will create a geographical balance. Publicis has been very active in growing its presence in emerging markets and relatively weak on the US market, while Omnicom main strength still is USA. I remember Jean-Marie Dru when CEO of TBWA, telling me: “Whatever I do, in my daily To Do list,7/10 items refer to a US client”.
Merger of Egos
Sir Martin Sorrell reacted to my question: “Co-CEOs is not an easy structure. Time will tell if the cultures will click and whether clients and talent benefit- and how $500 million of synergies will be generated without job cuts.
Of course, Omnicom and Publicis growth strategies were drastically different. Being in a public company, John Wren favored short term results and reluctant to invest in high priced ventures while Publicis family management culture was more open to long term investment. Also, I can see differences in their management styles: Wren’s management philosophy is to hire and delegate to the right talent while Levy’s reputation is to micro manage the business. Nevertheless, I can see a management style which strongly unite them: When it comes to money, both guys are control freaks! And their teams are trained to it!

And now, What!
Miles Nadal rejoices as he sees this as a “huge opportunity for MDC ‘s Reputation as “The PlaceWhere Great Talent Lives” creating Value Added for the Holding Co and its partners agencies”. Continuing to quote, Martin Sorrell: “Further consolidation in our industry was inevitable as we have said on many occasions. An equilibrium may be starting to be established, which will generate further significant opportunities for WPP” He adds: “organically!”

So let’s wait for the next “inevitable” consolidation. Looking at mere facts, Sorrell could buy IPG to remain number one. He would acquire some jewels such as R/GA,or  Huge and increase the WPP Revenue split in the US. Unless he agrees with David Jones that “It sounds like pigs are flying” and offers Vincent Bolloré the opportunity to sell Havas and make the high return deal Bolloré has been suspected to target for years.
Your turn to serve, Martin!

  • Dan Pearlman

    The proposed merger is quite interesting, but fraught with many potential problems as well as benefits. First, it is entirely possible that the merger will be negated by the powers that be for several reasons, including reduction of competition. If the merger moves forward, however, no doubt there will be economic efficiencies. But as noted above…what about culture fit, firewalls to deal with possible conflicts, bureaucratic snafus, more powerful trading desks, synergy or not between digital and traditional services, greater leverage against or collaboration with the likes of Google or Facebook?

    Time will tell…and the success or failure of this merger will ultimately be determined by existing/potential clients who move toward or away from the flame.

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