Omnicom, Publicis merger will not re-structure local agency partners

Stakeholders in Nigeria’s advertising industry have taken a critical assessment of the ongoing merger between Omnicom, a leading global advertising and marketing communications services company with headquarters in New York, USA, and Publicis, a French multinational advertising and public relations company, headquartered in Paris, and conclude that the merger will not create business changes in the Nigerian global networks.

Omnicom, which provides services to more than 5,000 clients in more than 100 countries, manages a portfolio of global market leaders comprised of three global advertising agency networks – BBDO, DDB and TBWA; numerous leading national advertising agencies some of which are represented in Nigeria.

On the other hand, Publicis has in its network Leo Burnett, BBH and Saatchi and Saatchi. Those who spoke on the expected $23 billion revenue merger described it as a global phenomenon that will not have ripple effect in Nigerian agencies that have relationship with the global agencies.

A former staff of Publicis Consultants Soulcom, the PR arm of SO&U Saatchi and Saatchi believes the merger will not affect the local management of the agencies in Nigeria, as the local agencies are entities on their own as they have different management.

According to him, Omnicom and Publicis at the international level must have taken into consideration the local interest and clients before the merger, and there may not be conflicts, as “they must have informed their respective clients before the merger to intimate them on the deal and assure them that it will not conflict with handling of their brands.” In his view, Ikechi Odigbo, CEO of DDB Lagos, who believes that the merger will be completed, says while the global networks under Omnicom and Publicis will have a common ownership at a very complex level, the global networks will continue to compete against each other for the same business, just like they have done before. So, it doesn’t really change much.

On whether the global merger of the two big agencies will create issues on handling conflicting brands, Odigbo says the brand conflict or not will arise at network level and not at holding company level; “I don’t foresee conflict at the subsidiary levels.”

The global networks though are owned by the two holding companies that have come together, but they have bouquets of global brands they work for. At local levels, they will not be operating as if they are sister companies. If a pitch is thrown open they could all compete.

If there would not be any difference at the local markets, then what does the merger mean both at global level and local levels, he says it is largely at a strategic and financial level. That is what matters at that level. Strategic is how to enhance the value of the holding company, investments and stocks. They are not focused per se in the business of advertising or brand building.

Kayode Oluwasona, CEO of Rosabel, an affiliate of LeoBurnett, equally states that there will be nothing really serious about the merger for networks, as nothing will change and everything happening will be in formality.

“It is a global phenomenon. It is holding company goal. At the international level, they are merging to deepen their financials. For us in Nigeria, yes, some agencies are part of Omnicom and Publicis groups, but globally it is the issue of the biggest,” he says, believing that share price will likely grow and it will be the biggest network in the world and more negotiation powers.

By: Daniel Obi