Like just about every executive of every advertising, digital and PR agency, small, medium or large, I stopped everything I was doing (which, if I recall, was nothing at all) to devour breaking news reports detailing the highly-hyped Omnicom-Publicis break-up. It was like a rubber-neck delay caused on I-95 after a truck jack-knifes. The entire marketing world came to a halt for a nanosecond or two.
I wasn’t at all surprised to read that the corporate coupling had nosedived faster than Governor Chris Christie’s ratings after BridgeGate because, in my mind, it was being created for all the wrong reasons. To wit:
1.) Growth, for the sake of growth, is a very poor substitute for strategy (And, that’s said with all due respect to Richard Edelman’s stated goal of becoming PR’s first $1 billion PR Firm). Richard’s financial goal sure wouldn’t get me charged up and ready to stuff another $1 million account in the firm’s coffers. Nor would it answer the ‘why’ question. (i.e. Why does Edelman exist and why do I, as an Edelman employee, go to work each day? Surely, not to make Edelman the first $1 billion PR firm).
2.) The merger was designed NOT to better serve clients but, rather, to enable the new entity to compete with Google and other tech/search companies in the rapidly-expanding, and highly lucrative, data gathering world (Think: NSA surveillance).
3.) Clients of both organization saw, first-hand, what we in the independent agency world have known all along: global holding companies serve one master: the investment community. Sure, they do nice work, but clients’ needs come second and employees’ concerns run a distant third.
4.) The larger the organization, the bigger the egos. This divorce came down to an ego clash over who would serve as the chief financial officer of the combined entity. That would be laugh out loud funny were it not so sad.
In the aftermath of the implosion, the top advertising trades are already wondering out loud if small is the new black. I’ve read countless pieces wondering if the Omnicom-Publicis divorce will be the straw that finally breaks the back of the symbiotic relationships between global brands and global holding companies. Thanks to the light that was shed on the conversation between Publicis and Omnicom, clients now know FOR sure that their business strategies aren’t what’s keeping the CEOs of holding companies up at night; it’s meeting the latter’s quarterly numbers.
True to course, though, the PR trades are reporting the dissolution with little more than already-stated facts. There’s been no analysis and no hypothesizing about the larger implications. And, that’s because the PR media are scared silly of the break-up because it threatens their business model which, stated briefly, might be best described as: ‘Content of, by and for global agencies and the mega brands they serve.”
Global agencies spend the most money in paid advertising. They also buy the most tables at the countless awards’ ceremonies and, oddly enough, they also happen to win the most awards at every single competition. Talk about a random coincidence.
There has never been a better time to be a smart, nimble independent agency that provides a whole host of integrated solutions. And, there’s never been a better time to put to bed for good all of those PR Week predictions that the future belongs to a few, large global holding companies (Remember the stories they ran after IBM consolidated all of its business with Ogilvy Advertising and a hastily-assembled consortium of Omnicom PR agencies)?
Small is the new black. And, I couldn’t be happier to capitalize on our many strategic advantages over the slow, lumbering aircraft carrier-sized holding companies who not only can’t figure out how to complete a merger, but publicly air their dirty laundry (the worst of which is admitting they place their own financial interests ahead of their clients’ needs).
Dandy: Nice discussion of the failure of Omnicom to acquire Publicis. The motivation for both was what was referred to as “scale” in the hour-long Omnicom teleconference May 9. OMC & Publicis, combining their buying clout, could further squeeze media, suppliers and employees. Here is the link to it: http://edge.media-server.com/m/p/2zji54v6/lan/en
The four giant ad/PR conglomerates (including WPP and Interpublic) have the power to say which media live and which die. Almost no one ever writes about this frightening concentration of power. The amount of consolidation in ad buying exceeds that of concentration in the airlines, banks, railroads, telecommunications and other industries but media dare not mention it.
With respect, while I generally agree with your overall perspective, I do want to react to one point. I think what Richard Edelman is saying is that he wants his firm to be good enough to be the first billion dollar agency — whether it is talent, geography , scope of services or leadership — all areas in which Edelman has been leading the field. As the late Y&R leader Ed Ney said, “Do good work and the money follows.” I think that’s why people go to work at that firm, and why clients retain them. Achieving a $1 billion is the result, not the strategy.
How about this? “Monolith is the New Stupid”