This week the biggest advertising company merger in history was announced – between Omnicom and Publicis. The combined stock market value is $35 billion and there will be 130,000 employees in the newly formed entity. Those of us in the public relations industry are familiar with the two, as they are also the holding companies for a number of global PR firms like FleishmanHillard, Ketchum, and MSL Group, with hundreds of millions of dollars of revenues between them.
It’s curious then that the PR “spin” coming out of both parent companies was squarely focused on advertising, and more specifically the desire to capture more revenue from digital advertising.
There’s no doubt that advertising supplies the largest share of revenue to both companies and that the newly combined parent organization sees Google’s analytics-driven ad revenues as fuel for new growth.
The combination does raise a few important questions for the PR agencies being aggregated into a single organization:
- How will they handle conflicts of interest? Surely, with $35 billion in revenues, agencies within the same parent company will represent clients that are competing against one another.
- What message does the parent company’s singular focus on advertising send to the employees and clients of the PR agencies? If I’m an executive in one of these agencies, I’m worried about the fall-out from this announcement.
And there is a key question for every business seeking to hire an advertising, marketing or PR firm: what does a combined company consuming $35 billion in revenues mean for competition – and prices – in the market? That will be for the anti-trust regulators in Europe and the U.S. to find out. But it is worth keeping in mind.