Implications for Clients: The Announced Omnicom-Interpublic Group Merger

The recent announcement of a potential merger between Omnicom (OMG) and Interpublic Group (IPG) has sparked considerable interest across the advertising and media industry.

While the merger is still in its early stages and may take until the end of 2025 to finalize, it carries several potential implications for clients. Assuming the merger proceeds, clients could eventually gain access to an expanded portfolio of services combining the strengths of both agencies. This might lead to more comprehensive and innovative solutions in the future – from the use of AI to improve media planning to better data analytics.

Stronger Global Presence
The proposed merger suggests a potential for a stronger global presence. The combined entity would be the largest media holding company in the United States and Latin America and would have a more significant presence in Europe and Asia. Although it would not be the largest holding company globally, clients operating in multiple regions could benefit from more unified and strategic global campaigns. However, these benefits would only materialize post-merger.

Potential for Future Efficiencies
Clients might anticipate future cost efficiencies due to the scale of the merged entity, although this will be largely dependent on how your negotiations unfold. However, any changes in service or fees would only occur after the merger is finalized and integrated. Some initial staffing reductions have already been communicated to individual teams at agencies, and further reductions are to be expected in the coming months. The vast majority of staffing reductions will likely not be with account teams, but rather on personnel made redundant in back-office functions (e.g., finance and HR) and in management.

Uncertainty During the Transition Period
As with any major corporate merger, there is an inherent period of uncertainty. Clients should remain vigilant during this transition, recognizing that there could be shifts in services, account management, or strategies over the next several months and after the merger is finalized. Staying informed and maintaining open communication with agency representatives will be crucial. Additionally, voicing support for agency staffers who are important to your business can help ensure continuity and quality of service.

Potential Conflicts with Competitors
While the merger could lead to enhanced offerings, it also raises questions about how the combined entity will address potential conflicts arising from competitive accounts. Clients can expect that the new agency will implement firewalls to safeguard sensitive information and maintain trust.

3 Things Clients Should Do to Prepare

1. Review Competitive Account Conflicts: Request a list of any competitive accounts that could cause conflicts in service. Check contracts to ensure appropriate conflict language is in place.
2. Check Data Usage Clauses: Examine agency contracts for provisions related to data use, ensuring clarity on what is allowed and restricted.
3. Maintain Open Communication: Transparency is key. Ask your agency how they see the merger impacting your business, and speak regularly with them about it to gain a better understanding of the process and potential new services or offerings.

While it is still early, clients should start preparing now. This is an evolving situation, so feel free to reach out if you would like to receive updates or schedule a call to discuss specific next steps that apply to your business, helping you navigate this agency merger in the best way possible.