• by Joe Mandese  @mp_joemandese, December 21, 2006

The merger of Digitas with Publicis' interactive media assets creates a new digital media powerhouse, the likes of which has not been seen on Madison Avenue before. The resulting organization will have the global resources of Publicis' multinational marketing services network, as well as the media-buying scale to compete in a sector where the power has been steadily shifting to the major portals and search players.

"This allows us to work with Yahoo, Google and Microsoft in a different way, because we are clearly the biggest player in digital media now," boasts David Kenny, chairman-CEO of Digitas, who emerges from the deal with responsibility for leading Publicis' overall digital media strategy.

"We can really scale up with the portals in a way that has not been done yet. Nobody has the media scale and the global reach we have now. Those are the two main structural things we gain from this."

Kenny says Digitas had already been developing the means of leveraging its estimated $1 billion in annual digital media billings on its own--but coupled with the digital media-buying clout of Publicis' shops, will triple or quadruple its market presence virtually overnight.

The deal also enables Digitas to dramatically accelerate its global resources by immediately interconnecting with Publicis' worldwide network, giving it instant street cred in virtually every significant media market on the planet. That will be a huge benefit to existing Digitas clients, but will also give Digitas more leverage in competing for new business.

Kenny--who will sit on a Publicis digital board representing Digitas, Modem Media and Medical Broadcasting Co. as well as other media, technology and production operations--says the plan is not to consolidate with Publicis' other digital advertising services, but to figure out ways to "leverage them."

Culturally, Publicis and Digitas are a perfect fit. Both organizations pride themselves on doing things differently, and both have an acute focus on marrying creative and media services with a strong foundation of analytics.

Asked if the big online media suppliers should be concerned about Digitas' newfound clout, Kenny demurred, citing a friendly phone exchange with the management team at Google. "We had a great call. They're very excited about having a partner with scale. We can do some great things together."