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If Omnicom’s acquisition of Interpublic (IPG) goes as planned, the ‘big six’ holding companies will become the ‘big five’ before 2025 is done.
Through its reported $13.25 billion acquisition of its rival, Omnicom will now be the dominant network in the U.S., competing with French powerhouses Publicis Groupe and Havas, U.K.-based WPP, and Japan’s Dentsu for ad budgets.
Ink is expected to dry on the deal within 12 months, pending regulatory approval. Brian Wieser, an advertising industry analyst and founder of consultancy Madison and Wall, said for Omnicom, the sooner the better.
“Speed of completion is important because the longer the two companies are going through the process, the more its competitors will go after employees and clients,” he said.
While competitors reel from the news, announced unexpectedly two weeks before Christmas, ADWEEK spoke to analysts and M&A experts on how the deal might impact long-established holding company power dynamics.
1. Publicis Groupe’s reign at the top might be short-lived
Standing beside Snoop Dogg last week, Publicis Groupe CEO Arthur Sadoun proudly announced the network is poised to claim the title of the world’s largest advertising holding company by revenue by the end of 2024.
Publicis recorded $10.5 billion in revenue for the first nine months of 2024. Comparatively, WPP made around $10.2 billion. Consensus estimates from financial research platform Visible Alpha expect Publicis to pull in sales of $14.5 billion by the end of the year.
Publicis’ reign at the top could be short-lived, though, as Omnicom’s newly combined company boasts revenues of $25.6 billion, based on 2023 figures. This number alone gives it the ability to unseat the French group–and all other members of the big six–next year.
2. Consolidation, consolidation, consolidation
Matt Lacey at M&A advisory firm Waypoint Partners said the acquisition means the three top networks by billings–Publicis, WPP, and Omnicom–will end up looking “quite similar” in their integrated offerings and competing more heavily for big briefs.
He observed that Omnicom and IPG have preserved their individual agency brands the most among the big six, adding that Omnicom has been rationalizing to “some extent.” Earlier this year, the network announced the formation of the Omnicom Advertising Group (OAG) pooling BBDO, DDB, TBWA, Goodby Silverstein & Partners, and others under one business unit.
Lacey added: “Putting more and more separate branded businesses into big silos is not an option in a deal of this kind. Therefore, we’ll likely see significant consolidation of agency brands over the next few years, akin to what WPP has been doing.”