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Omnicom’s reported $14 billion blockbuster acquisition of IPG has the potential to rival Publicis Groupe‘s position as a center for tech and innovation excellence, thanks to the potential interplay of the new Omnicom entity’s data, commerce, and AI tech capabilities.
But, while having separate pieces of the puzzle will be helpful, merging them successfully is more complex. And the agency-holding company structure has been under pressure for some time, with more nimble competitors ready to snap up ad spend.
“Omnicom’s merger with IPG signals to competitors … particularly Publicis and WPP … that OMC is consolidating to dominate in scale, AI capabilities, and service integration,” said Tom Triscari, senior advisor, Landmark Ventures.
Both Omnicom CEO John Wren and IPG CEO Philippe Krakowsky pointed out that their combined resources will boost their technology investments. Wren nodded to gen AI as a game-changer for the combined entity and expects it to transform how ads are created, optimized, and delivered. Wren’s vision is to pool investments into technologies that can revolutionize advertising practices and cement Omnicom’s leadership in the next phase of media innovation.
Omni, Flywheel Digital, and Acxiom: a potent combination
Acxiom, which bought IPG for $2.3 billion in 2018, has a wealth of first-party audience data and gives the newly formed Omnicom a massive advantage in targeting and personalized marketing, a space that is gradually becoming automated.
“Together, they’ll command roughly a third of all U.S. media billings [for media buying],” said Ana Milicevic, co-founder, Sparrow Advisers. “When you think about how much value various algorithmic and AI-driven media optimizations like Pmax have generated on the walled garden side, it becomes an interesting proposition to enable that at a holdco level.”
Pairing Acxiom’s data with Flywheel, the commerce media company Omnicom bought for $800 million last year, will mean the combined entity can unlock consumer insights and drive precision marketing, positioning it to challenge Publicis’ media strength and expertise.
“The combination of the Omni marketing operating system, Flywheel Digital, and Acxiom capabilities is a potent one, enabling Omnicom to better compete with Publicis Groupe, its Epsilon PeopleCloud, and recent commerce acquisition of Mars United,” wrote Jay Pattisall, VP, principal analyst at Forrester.
