A pending merger of Publicis and Omnicom to form Publicis Omnicom Group represents the biggest advertising group in the world with combined revenues were $23 billion in 2012.
To deal with potential concerns about an American company completely taking over Publicis, the headquarters will be shared between Paris and New York, as well as the two CEO position will be shared among the previous company heads.
Comparing the two companies, Publicis has more exposure to emerging markets and digital advertising (websites, mobile devices, and other non-traditional media), while Omnicom provides scale to the combined company. Together, the merged company is expected to have greater media buying power leverage and also the ability to better fight against digital advertising giants including top dog, Google.
Some of the potential challenges include regulatory approval, conflicts with accounts between companies (Coke/Pepsi, AT&T/Verizon, etc.), and mixing the two corporate cultures.
The future of advertising is clearly digital, and more specifically, real-time. The leading provider of automated, real-time trading advertising is Google. However, Publicis Omnicom Group will certainly make a run at them in areas that are perhaps unexpected. Today, real-time bidding is a relatively small portion of advertising, as it is applied to online/mobile only and accounts for 19% (expected to reach 29% by 2017).
However, real-time bidding could eventually reach traditional media (broadcast, outdoor, etc.), and if so, would represent a sweet spot for the likes of Publicis Omnicom Group who are already operating “Trade Desks” that buy display ads for their clients in digital media.
For more information about the merger, and to better understand the implications for digital media, potential further M&A, and more, see: