The Scoop: Omnicom’s acquisition of Interpublic Group will change the PR industry

Headlines on the merger of Omnicom Group and Interpublic Group tout that it will become the largest advertising company in the world. Which is true. But by combining forces, the two megacorps will also indelibly alter the PR industry.

Each organization owns numerous PR brands. Most recognizably, however, Omnicom is the parent company of FleishmanHillard while Weber Shandwick falls under the Interpublic umbrella.

“The combined company will bring together the industry’s deepest bench of marketing talent, and the broadest and most innovative services and products, driven by the most advanced sales and marketing platform,” a press release posted on both organizations’ websites reads. “Together, the companies will expand their capacity to create comprehensive full-funnel solutions that deliver better outcomes for the world’s most sophisticated clients.”

The release says that in total, the merger will bring together 100,000 practitioners working across specialties including “media, precision marketing, CRM, data, digital commerce, advertising, healthcare, public relations and branding.”

Why it matters: In 2023, Weber Shandwick was the second largest PR agency by fee income, while FleishmanHillard ranked fourth, according to Statista. By combining forces, they’ll leapfrog to No. 1, easily bypassing BCW in third and Edelman, which currently holds the top spot.

The press release cites cheerful reasons for the merger: “highly complementary assets” and a shared “foundational belief in the power of ideas enabled by technology and data.” But the Wall Street Journal notes the ad-driven companies are fending off constant competition with advertising platforms like Google and Meta while also fending off the threat of AI to replace at least some copywriters, graphic designers and, yes, potentially PR practitioners.

The news of the merger comes just days after Edelman cut 5% of its workforce and announced a major restructuring that brought some of its boutique brands back under the core Edelman banner. The subsequent merger, with a likely reduction in the number of brands that will sit under the restructured Omnicom, is yet another trend in the direction of agency consolidation. As AI grows, as the media landscape morphs, agencies are having to take a long, hard look at what makes them successful and cut off underperforming units.

While the press release did not mention layoffs, it does say that the acquisition will lead to $750 million in cost synergies – and it’s likely that there will be at least some reduction in headcount. However, before that can happen, the deal will likely face government scrutiny. Will this company just control too large a slice of the advertising and PR pie to keep the industry competitive?

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Allison Carter is editor-in-chief of PR Daily. Follow her on Bluesky or LinkedIn.