I stifled a chuckle as I read yesterday’s New York Times coverage of the proposed merger between global holding companies, Omnicom and Publicis.
Reporter Tanzina Vega said the “…deal is being billed as a merger of equals.” To which I respond, “Ha!”
As a refugee of WPP, and first-hand witness to countless, so-called mergers of equals at that global holding company as well as client organizations, I can tell you three facts:
– There is a clear winner and a clear loser in every merger of equals (Think: Daimler/Chrysler)
– Clients hate mergers because conflicts abound. As a result, many treasured, longstanding relationships will come to a screeching halt
– To quote strategy guru, Gary Hamel, large mergers and acquisitions are “…poor substitutes for strategy and vision, and almost always indicate neither company has either.” Despite what the press releases might say, this was a pure power move by both holding companies to add size. Period.
I can also tell you a tsunami of fear and anxiety is sweeping the hallways of every single Publicis and Omnicom agency. Why? That dreaded word: redundancy. That’s why.
Back office jobs in one group will be eliminated entirely. Several well-known firms in each holding company will disappear, or be absorbed into a former competitor’s folds (Think: GCI and Cohn & Wolfe), AND Madison Avenue will be awash in resumes.
One final note about the Times article (and this one is aimed squarely at our self-congratulatory PR trade media): there wasn’t a single mention of the PR arms of Omnicom or Publicis in the text. Further, reports Vega, the merger of equals was consummated to “…better capture profits from digital media and emerging markets.” PR wasn’t even an after-thought.
So, note to my peers at such legendary PR firms as MSL, FH, Ketchum and their various conflict brands: not only do you need to start thinking about your career paths, you should also start wondering about the importance of PR within your new, super- duper holding company.