Omnicom Group and Interpublic Group (IPG) announced their intention to merge to form the largest global agency holding company. Executives indicate that they anticipate closing the deal in the second half of 2025. This would reshape the marketing services category by consolidating the media scale of two global holding companies, accelerating the role of technology and AI in marketing delivery, and setting the industry on a path toward a hybrid services and SaaS model. Both Omnicom and IPG executives held a joint conference call earlier today. What we know and can infer about the proposed deal thus far is:
- This is an acquisition, not a merger. Omnicom is acquiring IPG — this is not a merger of equals. Omnicom would be acquiring a slightly distressed IPG that has reported relatively flat growth for the last five quarters. This shows in the proposed leadership of the new company. In a joint conference call this morning, the two companies announced that John Wren will remain chairman and CEO of Omnicom; Phil Angelastro will remain EVP and CFO of Omnicom; and Philippe Krakowsky and Daryl Simm will serve as co-presidents and COOs of Omnicom. We assume a similar dynamic for the eventual structure of the new company.
- The benefit of this acquisition is scale. The new company would enjoy significant scale of technology, data, media clout, and the ability to produce content at the velocity and volume of media impressions. We anticipate that IPG Mediabrands will likely roll up to Omnicom Media Group, IPG’s growing commerce practice will likely be aligned with Omnicom’s Flywheel Digital unit, and Acxiom will likely be aligned with the technology group managing Omni, the holding company’s suite of proprietary technology. The combination of the Omni marketing operating system, Flywheel Digital, and Acxiom capabilities is a potent one, enabling Omnicom to better compete with Publicis Groupe, its Epsilon PeopleCloud, and recent commerce acquisition of Mars United.
- The new company would concentrate a culture of creativity. The Omnicom and IPG acquisition would place some of Madison Avenue’s most iconic creative agencies, such as McCann, FCB, The Martin Agency, Mullen, TBWA, BBDO, DDB, Goodby, and GSD&M, under single ownership. Both Omnicom and Interpublic Group leverage agency-first go-to-market models, rather than an integrated, holding-company-first model like that of Publicis Groupe or Dentsu. Omnicom and IPG’s like-minded approach to agency brands makes for a stronger likelihood of successful integration and enables the new company to focus on client and talent retention.
Executives from both holding companies acknowledge that details regarding future leadership and structure remain undecided and that the deal is subject to regulatory review. Nonetheless, the larger industry and client implications are beginning to come into focus. For clients of either Omnicom Group or IPG, this acquisition means:
- Fewer enterprise choices will facilitate more independent options. The “big six” holding cos. may soon be the “big five,” creating some concern with having fewer options. Yet consolidation at the global level makes for opportunities in the independent marketplace. PE-backed, independent agencies like Horizon Media, PMG, DEPT, Tinuiti, Wpromote, and others have grown to capture scale in buying while delivering performance and tech skill. These companies must and will react to a shifting competitive landscape. Anticipate more growth in independents’ innovation investments and more focus in their proposition to compete with the global consolidation of marketing scale at Omnicom, Publicis, and WPP.
- Technology and innovation investments will accelerate AI’s role in marketing services. Omnicom and IPG executives point out that the combined resources will boost their technology investments. This will accelerate the already-underway AI arms race among the holding cos. and independents: 61% of agencies already use generative AI in marketing, the most mature group compared to IT, marketing orgs, and in-house agencies. Marketers should anticipate the proliferation of AI marketing in production, creative development, and media activation. As agencies race to build competing AI marketing platforms, the combination of SaaS and services will change not only how marketing is created but also how it’s paid for.
- Principal media solutions will proliferate and grow to account for nearly 10% global billings. Until recently, IPG was the last major holding company not to take an interest in media. While principal media practices are controversial, our research suggests that they represent less than 10% of total global media dollars under agency management. Yet with Omnicom’s existing principal media framework, marketers should expect a percentage of the IPG Mediabrands/MAGNA dollars to transact in principal media solutions, advancing the practice as more mainstream within the industry and within a combined Omnicon Media Group and IPG Mediabrands.
If you are a Forrester client working with Omnicom or IPG and want to understand what this acquisition could mean for your business/brand, feel free to book an inquiry or guidance session with me.
Some additional Forrester resources include:
The Forrester Wave™: Media Management Services, Q4 2024
The Marketing Creative And Content Services Landscape, Q4 2024
Predictions 2025: Marketing Agencies
Brand AI Models Will Reinvent How Marketing Creates Business Value