So this weekend in the #adlife, Omnicom and Publicis Groupe announced they will merge into a creatively named holding company called Publicis Omnicom Groupe. What this means is that they will become the largest advertising holding company eclipsing WPP and leaving IPG and Havas behind.
From the company’s point of view, this will be a win-win with their increase in overall market share, synergies between formerly competing shops/agencies, and increased efficiencies. In other words, this will suck for the average ad professional since there will just be an illusion of choice when switching shops, possible redundancies due to consolidation, and aggressive cost-cutting in reduced healthcare and 401k benefits. Regardless, this will be great because it will increase overall ROI for shareholders, result in an increase in freelancers from all the project layoffs, and lower starting salaries due to the glut in freelancers and reduced costs.
On the flipside, this will be a boon for indie shops since they have a chance to steal some business away from the corporate agencies. With the merger, there are now clearer conflicts of interests and less stability for the ad professional, something indie shops could take care if they make the right decisions.
This will also be great for the other holding companies due to the expected increase in freelancers and available talent. With the increase in freelancers due to resignations or layoffs, this means companies can work harder to get contract work at lower rates or lower starting salaries since we all know that a glut in talent leads to lower costs. Also, this merger will get other holding companies such as IPG, Havas or even Dentsu to start thinking about merging or strategic alliances.
All this news about holding companies merging at the corporate level may seen boring and academic, but the short story is that all ad professionals need to start protecting their necks. Whether this means kissing up to the department heads or senior colleagues to get them to protect them or act as their advocates during restructuring time or simply switching jobs before things get bad at the office, everyone is on their own in light of these changes.
This means people who are out of the job will expect to be competing with more freelancers for gigs or will need to pare down their expectations for salaries or benefits. Most of all, everyone needs to get ready for shops being reshuffled, re-branded, realigned and relaunched similar to what WPP did with G2 when they merged it with related shops and relaunched it as Geometry something after severing its links with Grey.
Also, the Asian economies are going to slow down so don’t expect to find work in this side of the world because ad spend if also going down just like in North America and Europe. Or this could all fail due to anti-trust regulations in the US and EU.