Monday, July 29, 2013

Publicis & Ovicom Joins Forces To Create Advertizing Tycoon

I learned this morning that French advertizing company Publicis has decided to create a holding with American group Omnicom.  The group is going to be a holding with headquarters in Holland (??? Probably for taxes reasons) with operations main office in the US and France. The new holding will become the largest group of advertizing in the world.

The merger is supposed to allow both companies to save money on expenses, and also to create different synergies. Now is it a good thing?

This is a question I don't really know actually... Indeed, some clients may be reluctant to remain in an agency for example that deals with their competitor, so I believe that they may loose some clients due to that. I actually believe that maybe the new group will need to sell some of their agencies due to that reason.

Also, I believe that where the group may create the best added value is about its consulting activities, rather than their power of purchase. Media companies are struggling financially, and I don't think they are in the capacity of providing better pricing due to the fact those both companies will buy together.

Now I am very happy for Publicis. I believe that Publicis did a great job and had the good strategy for years now. They have been able to shift from traditional media to digital with success. It is always great to see a French company succeeding as much as Publicis does.