The Missed PR Opportunity in the Publicis Omnicom Merger

Updated 5/9/2014:

The companies have called off the merger.

A few people have asked my opinion on the big Publicis Ominicom merger news from this past weekend. There has been plenty of reaction, and a lot of smart thinking about the deal has been published in outlets ranging from PRWEEK to the Economist. My reaction is that of a small business owner who vies with these giants.

I can’t help but see choppiness in the waters ahead.

Client Conflicts

Clients within these networks have yet another opportunity to see how these media goliaths poo-poo their concerns about competitive conflicts by shuffling their business between “independent” units. “Yes, we own Agency ABC which works with your top competitor, but we also own Agency XYZ – you can work with them; they’re just as good and there is no interaction between the firms … even though both are subsidiaries of ours.” This shell game has been going on for years, and for some reason the clients have bought-off on it … but the conflicts on this occasion are so egregious and high-profile, it’d be nice to see some fall-out. You can call me out for (a premature case of) schadenfreude but as an independent, standalone shop, SHIFT has been conflicted out of many great opportunities that the mega networks have somehow been able to sidestep their way into, and it’s damnably frustrating to see clients gulled into sending more money to the Big Guys.

Employee Churn

For a handful of top execs at the new Publicis Omnicom, this represents great financial upside and interesting opportunities to explore “synergies.”  For thousands of employees, however, a “merger of equals” tends to lead to more anxiety and frustration than anything else.  The $500M in expected cost savings can’t only come from technology and infrastructure.  Expect consolidation (read: layoffs) and a flight to the exits by the smart folks looking to beat the rush.  I don’t expect a flood… but I will be keeping a closer eye to our own recruitment efforts, to see what resumes come over the transom.  (We are hiring at all levels in all offices, by the way.)

Strategic Fumbling

We are talking about some of the largest, most influential agencies in the world, filled to the rafters with smart but egoistic leaders… all of whom have Big Ideas about the Big Changes wrought by Big Data and Social Media. As much as Publicis Omnicom might want to tout an integrated vision (to best leverage its … well, its leverage), my guess is that one-level-below the C-suite there is going to be confusion and jockeying about which agency’s in the pole position with regard to group strategy.

PR in the Bathwater

Make no mistake, this merger was about Advertising, Technology and Media Buying more so than Public Relations. Even though the workaday practice of being successful in Social Media (e.g., community management, social customer service) belongs squarely in the PR camp, the Big Money is still to be made in the Paid Media arena.  There are a great many superb PR pros in those conglomerates, but they will always play second fiddle to the paid media masters of the universe.

…This, to me, is the missed opportunity. As noted in previous posts, the credibility of Earned Media has far more intrinsic value to today’s consumers than Paid Media: even the most finely targeted advertisement is still a #$&* ad… unless it’s promoting the unbiased content of an influential consumer’s tweet, or the unpaid-for opinion of a mainstream journalist (even then, it’s still an ad and viewed with jaundiced eyes).  The opportunity to leverage Earned Media for Paid Media is, I’ll wager, going to continue to be overlooked by the Paid Media mavens in favor of expensive, eye-catching, buzzworthy campaigns that we all quickly “fan/friend … and forget.”

In other words: expect more of the same.

Todd Defren
CEO