Commentary
The Real Story Behind Publicom
- by Jon Bond , July 29, 2013
WHY?
I mean really, what is the real deal here? You know it’s not in the press release or the interviews the executives are doing. The truth won't even be in meetings between the merged companies, and maybe not even between those of the executives on either side. I think the true incentives are buried deep within the individual psyches of the key people. So, let’s speculate a bit.
Publicis had it planned for years.
Could it be that Maurice has finally found the perfect exit? One that culminates his career in a place that cannot be topped? Number one in size. For a company built on deals, this is a perfect final act. In fact, it or something like it may have been in the planning stages for years.
The evidence:
- For decades, no suitable replacement could ever be found for Maurice....is this really a coincidence?
- The family of Publicis founder Marcel Bleustein-Blachet has been rumored to want to get its money out of the business for years.
- Letting nearly irreplaceable top executives like Bob Lord and Laura Lang leave and Jack Klues to retire?
- And lastly, the coup de grace, Maurice is no dummy; nothing with him is ever a coincidence. I think it’s about Maurice and the family, and no one else was in on it. Ever. Case closed.
And Omnicom gets to take the whole thing over, and finally trump Sir Martin.
The evidence:
- Omnicom executives are younger, have a deeper bench, especially with the attrition of key Publicis executives this past year.
- Omnicom has a weak digital offering, but with Publicis digital assets, the day after the merger that is history.
- And finally, the branding. The Publicis name gets to stand first, which is traditionally awarded to the stronger, more dominant company. However, in this case, the batting order will be used to mask weakness, not display strength. Pierce the veil and it’s obvious that Omnicom will in essence be “acquiring” Publicis. Not today, but as Maurice and his lieutenants retire and move on, Omnicom people will fill the voids and it will become their company. The Publicis name is first because it has to be for the sake of appearances. For pride. But Omnicom has the hole card, so doesn't care about such trivialities.
Case closed. Everyone gets what they want, and it has nothing to do with money, clients, or advertising. It’s about a handful of powerful executives in the twilight of their respective careers who in one fell swoop, can cement their legacies and enter the history books.
Jon makes more sense than any of the other commentators. Duh!
Bingo. Jon nails the rationale here. In essence, Maurice gets to the finish line (his retirement) in 1st place with an 11th hour deal with Omnicom. John gets to run the worlds biggest ad holding company - winning the ad agency 1.0 race.
I think everything you've said is right, Jon. But there is also the matter of the business imperative, which is to bulk up sufficiently so as to avoid being subsumed by GoogleTwitFaceCom. So there's that.
excellent column, Jon! Congrats and welcome.
it's a bit of an extreme response to a succession problem, tho, don't you think?
Joe, right on spot, no wasted words. I love how you tell it like it is.
I can guarantee you that the merger had very little to do with Managing Big Data. What a crock.
Straight-forward and to the point. We've been predicting this for at least a year now. For those who have time, I encourage you to read Conversation's White Paper, "Marketing 2020." It goes through history of the holding companies and the inefficiencies that exist.
Here's to disrupting the landscape! http://www.convoagency.com/marketing2020/
This is about the best take on the deal I've seen, read or heard. Clearly, there are other truths at work, for instance the realities of competitive field tearing open with Google, FB, Twitter, as well as management consultancies, etc. But when it really comes down to it, Jon's take rings true more than any other.
@Jon...
I would agree with you on the pecking order of the names... Except, "Groupe" is spelled with the Gallic "e". Anyway, I prefer my AdScam name for this shitasmic conglomeration... "PubicCom." Big Data is without a doubt driving us towards Big Bullshit. The Ad Biz as we used to know and love it... Is definately over.
Cheers/George
Congrats, Jon, on an interesting and perceptive analysis of the Publicom deal. As a semi-retired journo myself, I have been watching Messrs Wren and Levy, for more than a decade. Yep, the former will end up as boss of the whole shebang - but its Maurice who'll exit with the biggest fiscal gain.
100% agree Jon. Omnicom is the much stronger "equal" and all they had to do is a little ego fluff and put Publicis's name first.
Look at the deal and truth is it's Omnicis not Publicom- and just like Chevron Texaco eventually "simplified" back to just Chevron, in less than 5 years they'll brush away the prefix and it'll be Omnicom again. After all, history is written by the victors
Great article and perspective Jon....
Hey Jon,
Wise pov as always. It will be interesting to see whether any clients will actually benefit from what seems largely to be heading toward a bigger version of business as usual. Could be good for many of us.
See you soon.
Rick
This is all doubtless true. For me the big question remains. Has Martin Sorrell started negotiation to buy or maybe merge with IPG? He too might like to take life a little bit easier.
Well said, Mr. Bond,
Adding to your argument around Levy’s legacy, is the additional attraction to a soluble problem. By that, I mean that the executive teams both Publicis and Omnicom both fancy themselves excellent integrators – they know how to add agencies to their roster, and streamline costs and deliver efficiency.
When faced with choice of challenges between having to increase the effectiveness of their agency rosters, or finally deliver on the promises of integrated marketing communications that we’ve all touted for years, and a massive integration project, both executive teams must’ve jumped at the prospect of spending the next 3 years overseeing this massive merger, simply because that’s what they know how to do.
Finally, this merger virtually assures that any global company that wants to market at scale must route through them to reach their customers. All without having had to improve the effectiveness of their own business one iota. Well played indeed.
By the time the merger’s complete, perhaps they won’t recognize the marketplace they’re supposed to serve.