In a recent setback, IPG lost Pfizer‘s creative account to Publicis Groupe in March, laying off 5% of its U.S. employees as a result. This week, ADWEEK revealed that IPG Mediabrands plans to lay off 103 people in January, according to a WARN notice filed in California (an IPG spokesperson said the layoffs were the result of a client loss, and not due to the Omnicom deal).
Yet Omnicom and IPG are touting the combined efficiencies and scale that the deal would offer its clients across consumer product goods categories, including healthcare.
There are benefits and drawbacks to massive scale, according to Chris Beland, VP analyst at Gartner.
“Omnicom and IPG are going to bring new offerings and tools to the table—the bigger organization has more resources,” Beland told ADWEEK. “The flip side for brands is that it reduces competition—there won’t be as many agencies to invite for RFPs.”
Though the healthcare category is a hefty ad spender, there has been some belt tightening, Beland said. Per Gartner research, pharma marketing budgets as a percentage of overall revenue fell from 9.6% to 7% in 2024, and paid media budgets remained flat, Beland said.
Bucking the current trend across categories, pharmaceutical advertisers rely heavily on traditional media such as TV, since they target a lucrative 65-and-up demographic that still watches networks such as Fox News, CBS, ABC, and MSNBC, per eMarketer. Pharma brands spent $3.4 billion on linear TV in the first eight months of 2024, an 8.1% increase from the previous year.
Better living through AI
Even in a high-touch field like healthcare, artificial intelligence (AI) is a hot topic, with analysts saying how technology is reshaping the industry will be front and center at the new Omnicom.
“The merger is a proactive move to get ahead of the changes that are going to be demanded of [Omnicom-IPG], which involves increasing the amount, quality, and variety of content, but doing it in a way that fits within the regulatory and approval process of pharma,” Beland said. “There are really big expectations from brands that they should see the benefits of the advances in AI technology.”
