I wrote last July, when this merger was announced
that I thought it was a bad idea. I am writing now to say that I am happy that
it fell apart. Months ago, I told a
friend that I couldn’t believe that this awful merger would come to pass. I don’t know a lot about the French side of
Publicis, but I couldn’t believe that Omnicom would give up financial
control. In my opinion Omnicom is the
best run of the major holding companies, partially due to their financial
controls and policies.
Be that as it may, good
riddance.
Here are five reasons why:
1 1) Creativity
would suffer.
During the
heyday of creativity, in the sixties, the really good creative agencies figured
out how to limit their own bureaucracy.
The star system was born. Since
the advent of the holding companies, there are no stars. Adding a humongous bureaucracy on top of the one
that already exists, could not have been good for the business.
2 2) This merger
may have been in restraint of trade
Anything
which limits competition is, in my opinion, restraint of trade. The P/O merger surely would have limited competition.
The holding companies have too much power.
3 3) This
monumental merger would have hurt career advancement.
As a
recruiter, we are often given assignments which agencies are unable to fill themselves
– even with their minions of in-house contract recruiters. The problem is that we and they are precluded
from introducing a person who works at any one of the holding company’s
agencies to another within the network. I wrote about this some time ago. And even though, for instance, Publicis, has a
procedure with which its people can apply on line to move from, say, Saatchi
& Saatchi to Digitas, it is an underutilized mechanism. The reason for this is fear of being found
out and being fired by an angry company or boss.
Add to
this that recruiters are precluded from sending someone who is working on an
account to any other agency which handles some part of that account. A person working on P&G at Saatchi cannot
move to the Citibank account at Publicis because Publicis is a Procter
agency. (People can move if they get
specific permission from their boss and from Human Resources, but that rarely
happens. And recruiters cannot do it at all, with or without permission.)
4) Publicis and
Omnicom are run quite differently
Each of
these networks is well run. Their methods
and systems are right for their own cultures and have evolved over many
years. One of the reasons the merger
fell apart is because they couldn’t agree on who would be running the combined
entity. Neither system would have been
right for the other. The French conduct
business very differently than we do – that is not a put-down; it is just a
fact.
5 5) Ultimately
the merger would have caused more consolidation
Inevitably,
just as the corporate back offices would be scaled back, there would be
consolidation among their agencies and companies. Each network already has too many redundant
companies.
Too many
of their companies have the same offerings, the same tools and the same process
(called by different names, but to the same end); this is especially true in
media. But consolidation would not be limited to just media agencies. Publicis
rolled Kaplan Thaler into Publics and LBi into Mr.Youth (now MRY). There would have been more of this. And to what
purpose? Efficiencies don’t justify the
limiting of creativity.
In my opinion, this was
merely a merger of egos. Every one of
the senior executives involved loved the idea of becoming the number one
holding company. It may have mattered to
the principals involved, but the rest of the business could care less.
Good riddance.
I totally agree with Paul who said about the Publicis/Omnicom merger, "It may have mattered to the principals involved, but the rest of the business could (couldn't) care less. Good riddance."
ReplyDeleteThe really good news is that we hopefully won't have to keep reading about this bullshit topic anymore.
Moral of the story for everyone being "Better to focus on actually making your current Brand(s) better, than just making it bigger via M&A."
So I'm placing my future bets on Michael Roth and Sir Martin Sorrell. Bill Crandall
Well said, Paul.
ReplyDeleteI'd add:
6) There was absolutely no reason to do it in the first place.
Philip
Philip: Funny you should have said number six. I actually thought about that. There was no reason at all. Thanks.
ReplyDelete