This week, the business and media commentariat have talked of little but the upcoming merger of Omnicom and Publicis, the second and third largest advertising groups in the world, respectively. As befits a venture which involves hundreds of the world’s most glamourous admen and women, the accompanying spin is so utopian as to be dazzling. Two central justifications are given for the operation: 1) this is not a messy acquisition but a ‘merger of equals’ and 2) as two of the world’s more forward thinking ad organisations, the merger will leave the companies better placed to innovate digitally. As far as I’m concerned, this is less a clarion call for a brave new world than the dying roars of a pair of dinosaurs.
The digital revolution was difficult for everyone, and the ad world has taken it particularly hard. Banner ads were a colossal early failure – you are, apparently, more likely to complete Navy Seal training, get a full house while playing poker, summit Mount Everest or give birth to twins than click on one. The frightening speed with which an offensive advert can be slammed over the internet has shocked a few big beasts, particularly WPP for some reason – Sorrel’s supergroup recently sparked a major kerfuffle in India. The growth of programmatic buying threatens to unleash a new wave of small, nimble companies on the goliaths, much as we saw in the world of finance with the growth of trading algorithms in the 80s and 90s.
Those succeeding fall into two camps. First, there are the new disruptors: barbarians from the tech sector not so much hammering at the gates as running in, stealing all the livestock and capturing a few toothsome peasants before the farmer even wakes up. Google is the obvious example: its display network is now eye-wateringly, pants-droppingly successful. The top 25 advertisers are now spending more than $150m each with Google. Then, there are the small challengers, who are fast and flexible enough to look at things differently. Take Curb, which has grown its revenues by 250% since its inception in 2008 because it skews its content ratios dangerously toward the offline – and is small enough to reliably check that the gamble is paying off.
While there is plausibly an advantage in pooling knowledge and resources for R and D, I can’t see it working. Just because Publicis and Omnicom are strong in media buying and technology, respectively, doesn’t mean that the two combined will form one brain capable of understanding both worlds. I’ve always had enough trouble getting 5 belligerent admen around a table to agree, let alone hundreds of them across several continents. More importantly, the model for digital success conventionally involves a small organisation developing a big idea which can then be rapidly upscaled. Attempts to hothouse creativity in the online world have tended not to come to much – a recent Guardian article, for instance, made a strong case for the government sponsored ‘Tech City’ in London being inferior to more free-enterprise equivalents elsewhere (http://www.theguardian.com/technology/blog/2013/may/01/tech-city-funding-uk-startups).
So is this a PR stunt? If it is, it hasn’t worked too well. The FT reports that effects on each company’s shares have been lukewarm at best, with Publicis up 0.25% and Omnicom down 0.55% following the announcement. Despite all the slick photo-ops, too, Wren and Levy, the two bosses behind the venture, are too savvy to do something like this just to get noticed.
Call me a cynic, but I smell panic. This feels like old school minds seeking solace in one another’s arms, as if huddling together with stop the nasty netfreaks from getting in. Alternatively, maybe the whole thing is a set up for some kind of horrifying Mad Men-inspired reality show, except instead of the winning smile of Don Draper, it’s the grinning visage of Maurice Levy staring straight out of the screen, undoing his shirt button by button…