Omnicom and Interpublic’s merger kicks off another era of ad industry consolidation

The news: Omnicom and Interpublic Group, two of the Big Four advertising holding companies, announced a merger that would create the world’s largest ad agency, usurping WPP’s top position.

The new titan: Omnicom’s proposed acquisition of Interpublic would shift the power dynamic in the ad industry, creating a behemoth with a massive and diverse client list that can provide the full spectrum of advertising services.

• The Big Four firms have spent the last year streamlining subsidiaries and fleshing out full-funnel services to both cut redundancies and offer a wider variety of services to attract clients. In June, Omnicom announced it was consolidating production units under one umbrella following similar moves from Publicis Groupe and McCann Erickson, which is owned by Interpublic.
• This combination will also create a data giant that could offer an unparalleled ability to precision-target consumers across ad channels, positioning the merged company to capture a larger share of the fast-growing digital advertising pie.
• Both companies have also made significant investments in AI: Omnicom struck a generative AI partnership with Google last year and has a similar deal with Microsoft, and Interpublic has spent tens of millions on AI technology.

Challenges: Acquisitions of this scale often come with redundancies and layoffs. The merged entity is likely to cut duplicative jobs and further consolidate its units, which could strain some client relationships. The companies projected savings of $750 million within two years.

The companies could also face significant challenges in integrating their varying advertising services and platforms. A bumpy transition period could make it difficult to attract new business from clients looking for easy avenues into advertising.

Our take: With worldwide digital ad spending set to reach $1 trillion by 2028—or this year, according to some forecasts—Omnicom and Interpublic’s consolidation play will significantly shift ad industry power dynamics and set the merged company up to capture more market share.

The surprising bid for further consolidation in the digital advertising industry is a sign that large companies view the incoming Trump administration as a green light for significant acquisitions—a sentiment Warner Bros. Discovery CEO David Zaslav has expressed outright.

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