Omnicom’s acquisition of Interpublic will create “headaches” as the companies combine, states WSJ
As Omnicom Group moves forward with its acquisition of Interpublic Group, marketing executives say clients of the two advertising holding companies might experience turbulence, but they could also see some benefits from increased scale, reports the Wall Street Journal.
According to WSJ: “Omnicom and Interpublic executives said their combination, which values IPG at more than $13 billion and creates a new leader in the industry, should give their clients a “comprehensive understanding of consumer behaviors and transactions,” and the resources to do better marketing.
Although the two companies work for some big-spending rivals—IPG counts T-Mobile as a client, for example, while Omnicom works with competing telecom AT&T—most marketing executives aren’t particularly concerned about conflicts.
“Still, the merger also will undoubtedly prompt some headaches as the companies combine.”
According to WSJ,”Omnicom executives said cost synergies are expected to come from eliminating duplicative spending with vendors, combining the companies’ real estate footprints and shared service centers, among other sources.”
In addition, to achieve the $750 million in annual savings predicted in the announcement of the deal, Omnicom and IPG “will likely part with some high-level executives who have developed close relationships with clients,” said one source.
Omnicom Chairman and Chief Executive John Wren, in picture, said that employees “may choose to change their careers, but I’m not worried about any of our senior people doing that because I think both cultures, both leaders here are sensitive to making certain that we provide career opportunities for the best and the brightest,” he said.
Any redundancies that are created by the merger could widen the talent pool for in-house marketing departments, in which marketers employ their own creative and media workers to do their advertising and other tasks, according to a CMO of a Fortune 500 company.
More here.
