Publicis-Omnicom tie-up creates $35bn advertising behemoth

The world's largest advertising agency will be created following the merger of America's Omnicom and France's Publicis.

America's Omnicom, the world's second-biggest advertising agency, is merging with its French counterpart Publicis, the third-largest. Publicis Omnicom will leapfrog Britain's WPP to become the top advertising group with joint sales of $22bn (32% of the industry's global total) and a combined market capitalisation of $35bn. CEOs Maurice Levy of Publicis and John Wren of Omnicom will jointly run the new group.

What the commentators said

Assuming it goes through, the deal "is easily worth the effort", said John Jannarone in The Wall Street Journal. Thanks to overlap in areas ranging from IT platforms to research, annual savings of $500m should be no problem. The longer-term rationale, meanwhile, is to establish a bigger footprint in the world of internet advertising, especially mobile.

Subscribe to MoneyWeek

Become a smarter, better informed investor with MoneyWeek.

Today, marketers spend $117bn, a fifth of the total worldwide advertising market, on digital advertising, said Emily Steel in the FT. Digital spending is expected to grow by 23% this year, compared to the overall market's 3%. Firms such as Google are offering new ways for marketers to reach consumers, and technology is mining data to target advertisements more effectively: ie, a dog food marketer would aim to show advertisements only to people with pets.

The tie-up could well help "this behemoth bulldoze into lots of exciting growth markets", said James Moore in The Independent. But this assumes that two CEOs with big salaries and egos can make a success of their double act a rarity in business history.

Advertisement

Recommended

Visit/investments/investment-strategy/600861/how-demographics-affects-stock-valuations
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Visit/investments/stocks-and-shares/600863/sirius-minerals-anglo-american-takeover
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020
Visit/investments/stockmarkets/600634/why-investors-should-be-cautiously-bullish-for-2020
Stockmarkets

Why investors should be “cautiously bullish” for 2020

Analysts have been out in force making rosy predictions for stockmarkets in 2020, but while there is certainly a case for optimism, investors should r…
17 Jan 2020
Visit/investments/stocks-and-shares/share-tips/600636/class-acts-going-cheap-buy-into-europes-best
Share tips

Class acts going cheap: buy into Europe’s best bargains

Value investing appears to be making a comeback, while shares on this side of the Atlantic are more appealing on metrics such as price/earnings ratios…
16 Jan 2020

Most Popular

Visit/investments/stockmarkets/601030/markets-are-starting-to-realise-just-how-bad-the-coronavirus-crisis
Stockmarkets

Markets are starting to realise just how bad the coronavirus crisis will be

As governments around the world throw everything including the kitchen sink in the fight against coronavirus, markets are reaching the “moment of maxi…
23 Mar 2020
Visit/economy/601027/money-minute-monday-23-march-will-whatever-it-takes-be-enough
Economy

Money Minute Monday 23 March: will “whatever it takes” be enough?

As we start to see the damage that the shutdown is doing, Money Minute looks at central bank measures to counter it.
23 Mar 2020
Visit/investments/stockmarkets/601028/stockmarket-crash-more-to-come
Stockmarkets

Stockmarket crash: more to come

The stockmarket crash was hard and sudden – and it might not be over yet. But while the short term outlook is awful, says Merryn Somerset Webb, that d…
23 Mar 2020
Visit/investments/stockmarkets/european-stockmarkets/600725/is-2020-the-year-for-european-small-cap
Sponsored

Is 2020 the year for European small-cap stocks?

SPONSORED CONTENT - Ollie Beckett, manager of the TR European Growth Trust, on why he believes European small-cap stocks are performing well.
12 Feb 2019