Over the weekend, Omnicom Group and Publicis Groupe announced a “merger of equals” to become the largest advertising holding company in the world, combining their annual revenue streams to add up to about $23 billion.
Clearly, the news will have the largest impact on the advertising industry, but a good many PR firms were part of the deal: Omnicom’s PR wing includes Fishburn Hedges, FleishmanHillard, Porter Novelli, Ketchum Pleon and Portland. Publicis has MSL Group and Publicis Consultants.
Just what effects will the merger have on those firms? What ripples might PR agencies feel—for example, pressure to merge, get bigger, and compete? PR Daily
asked a few PR experts to offer opinions.
David E. Johnson, CEO of PR firm Strategic Vision, says firms might absolutely feel pressure to merge in light of the weekend’s news.
“Yet many corporate clients such as Pepsi and Coca-Cola may feel uneasy with their accounts all under the same roof,” he adds. “It offers smaller companies with a worldwide reach to potentially scoop in and win accounts and also be able to stress a more personalized and targeted approach, which is the way marketing, advertising, and public relations has become with micro-targeting thanks to the explosion of social media. “
Colin Hutt, president of Primum Marketing Communications, offers a similar view. He says companies that have clients all over the globe may feel spurred to consolidate, but “a lot of public relations happens at the local level, and that leaves room for many other players.”
Shel Holtz of Holtz Communications + Technology says the merger doesn’t really apply any pressure to agencies to merge or look for conglomerates to buy them. Edelman is doing just fine as an independent agency; in fact, its independence seems to be an advantage.
Likewise, Samantha DiGennaro, founder and CEO of DiGennaro Communications, says she “can't imagine this will create a merging frenzy among agencies that were not already on the acquisition trail.”
Even so, Angela Betancourt, president of AB Public Relations, says the big merger could spur smaller firms to consider adding more resources to their toolboxes.
“Smaller companies have room for more organic growth, but increased competition and the desire to provide a larger variety of services makes two small PR companies’ joining forces not a far-off idea,” she says.
DiGennaro says it’s certainly possible the agencies directly involved in the merger could be pared down or smushed together.
“For now, each has its own distinct heritage and corporate ID, although, conflict is easier to manage within a PR agency than it is in the paid content or media buying spaces.”
Holtz says the thinking behind the merger almost certainly had nothing to do with PR, though having PR agencies involved does provide an added benefit to the combined Publicis/Omnicom, and, by extension, clients.
“By combining companies, the number of specialty firms available to you expands, which can't hurt,” he says.
Holtz also points out that Omnicom had quite a few separate PR agency brands under its umbrella before the merger, and they have all remained distinct.
“I don't see any particular advantage in bringing any of these together,” he says. “However, their back-end systems and the like may undergo some consolidation.”
Lines already blurred
As for whether the Omnicom/Publicis merger could make the division between PR and advertising that much fuzzier, many observers said it’s simply a matter of degree.
“The ‘lines’ between advertising and PR are so blurry already, I don't think this will change the course one way or another,” Hutt says.
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Betancourt says it could be an incremental step, though:
“This merger is adding complexity to an already ongoing conversation. PR and advertising each serve their distinct purposes. However, the trend I see occurring is that PR and advertising will no longer be in separate office buildings.”