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Omnicom’s takeover of Interpublic passed an “important milestone New York time on Tuesday.
The votes passed easily, with more than 90% in favour, although the takeover still requires regulatory approvals around the world to be complete, likely in the second half of 2025.
Now, as momentum appears to be building, the ad industry’s thoughts are turning to the impact of the merger that will create the world’s biggest agency group—with more than $25bn of global revenues, including nearly $15bn or 57% coming from the US.
This deal promises a long-awaited consolidation among the big six groups, which will now become a big five, and, arguably, a big three as Omnicom, Publicis and WPP open up a gap on Dentsu and Havas, especially in the US, in terms of media-buying scale.
It is a landmark moment for Interpublic, in particular. The first advertising agency holding company of the modern era launched in 1930 as McCann-Erickson, becoming Interpublic in 1961, and can trace its roots back to the founding of Erickson in 1902 and McCann in 1911. Now it is one step closer to being swallowed by Omnicom, founded in 1986.
Yet there was little sense of occasion at this week’s shareholder meetings. Both were virtual events, not in-person. There was only an audio feed, not even video.
In theory, shareholders could have quizzed the directors about the deal but when Krakowsky opened up the floor for questions at IPG, there was no response. “There appear to be no questions,” he said, allowing him to move swiftly to the vote. Similarly, Wren faced no questions at Omnicom’s meeting. Both events ended within ten minutes.
If shareholders have doubts about the all-stock deal—Omnicom offered a 21% premium, valuing IPG at $13.3 billion, in December, but Omnicom’s own share price has fallen more than 20% since then, and IPG is now forecasting revenue decline this year—they chose not to air them in a public setting.
The reality is that shareholder approval looked to be a fait accompli after two influential advisory groups, ISS and Glass Lewis, recommended it.
The Omnicom-IPG deal is set to reshape the agency sector globally, and the US will be key. “If you think about where perceptions are formed inside large enterprises, the US has got more important, not less important, in the last five or ten years,” Rob Norman, the former chief executive of Group M North America, said.
However, there is also a sense of déjà vu and a changed landscape after the excitement of the Omnicom-Publicis $35 billion mega-merger that failed to complete more than a decade ago.
“There is something about this deal that feels less seismic than if it had happened 10 or 15 years ago,” Norman said. “I wonder if that speaks to a macro-diminishment of the sector as the concentration of power on the sell side with Google, Meta and Amazon has changed the power dynamic.”
While Omnicom has talked about the benefits of scale from the takeover, it has also said it wants to make $750 million in annual “synergies, " which will likely mean thousands of job losses.
Regulatory approval
Omnicom needs to win regulatory approval in as many as 19 jurisdictions, including from the US, UK and European Union, according to the latest update from the company. The deal has already won consent in Brazil, Colombia and Saudi Arabia.
Winning the backing of the Federal Trade Commission, now led by Andrew Ferguson, a Donald Trump appointee, in the US is the priority and the regulator made a second request for information last week. “A second request can be noteworthy because most organizations make adjustments to their submission in order to address the additional questions or clarify their original submission,” Jay Pattisall, vice-president and principal analyst at Forrester and a long-time agency expert, said, although he does not see it as a likely obstacle to approval.
Another industry source warned it is hard to be sure about the “pro-business” intentions of the new Trump administration, which has been shaking up the FTC, even in recent days. However, the FTC and regulators in all other key markets, except China, approved the planned Omnicom-Publicis tie-up in 2014, before the two companies walked away.
While Omnicom and IPG say planning for their integration is “underway,” they “continue to operate as separate companies” as they await regulatory approval. The mood music internally suggests significant integration is likely to be several months away.
Media scale
Omnicom and IPG have talked about the importance of leveraging scale in media-buying—particularly in principal-based media, which involves buying inventory in bulk to get better deals—and combining their data assets, including Omni, Flywheel and Acxiom. IPG admitted it was struggling to compete in media after losing big accounts, including Amazon, last year.
In terms of media billings, the enlarged Omnicom Media Group would have 36.9% market share among the big five in the US, when it adds its existing 21.7% to IPG Mediabrands’ 15.2%, based on COMvergence estimates for media spend in 2024. That would put OMG well ahead of Publicis Media on 30.6% and WPP’s Group M on 18.5%—with Dentsu Media on 11.3% and Havas Media on 2.7%. (Figures have been approximated in the chart below.)
Globally, OMG would have 32% share by adding its 20% to IPG’s 12%. That is ahead of Group M on 28% and Publicis on 24%, with Dentsu some way behind on 12% and Havas 5%.
Globally, OMG would have 32% share by adding its 20% to IPG’s 12%. That is ahead of Group M on 28% and Publicis on 24%, with Dentsu some way behind on 12% and Havas 5%.
Hence the idea that there will now be a big three that will pull away from the others, although Pattisall said: “In terms of size, there is already a division among the holding company media agencies that include Group M, Omnicom Media Group and Publicis Media and another grouping including Dentsu Media, Havas Media and IPG Mediabrands. So the significance of the merger is shifting from the big six to the big five.”
Greg Paull, senior principal at R3 Worldwide, a pitch consultancy, said there may be a shift towards a “big three” for large media agency reviews but noted there are many other agency services apart from media where scale matters less. Clients still put a premium on “great, creative ideas” and “I think we will see a bifurcation between media and creative,” Paull suggested.
Last year’s General Motors creative review was a “wake-up call” as the US automotive giant looked beyond incumbent agencies from IPG and Publicis in favor of smaller players such as Stagwell’s 72andSunny and Anomaly and S4 Capital’s Monks, he said.
Winning over clients and staff
Omnicom and IPG’s biggest concerns during the current limbo period are to win and retain clients and reassure staff.
Jerry Buhlmann, the former chief executive of Dentsu Aegis Group, who led the sale of Aegis to Dentsu and the subsequent integration in 2013, said: “You’ve got to be very clear about what the vision is for the new business, the combination, and why is that relevant for everyone involved and why is it better? You have to position it as different and better.”
Buhlmann, who is now chair of independent agencies Dept and Croud, added it was vital to “massively over-communicate internally” during a merger process. “The senior leadership has to be unbelievably visible to everybody in that organisation. Communicate even if there isn’t anything to communicate. Communicate energy, communicate belief.”
He said the message during the wait for regulatory approval should be: “Don’t worry, we’re dealing with it, this will get approved, we do have a great future. Until we can execute the plan, you’re operating individually, everyone call up your clients, tell them you love them and over-service them.”
Wren and Krakwosky have co-hosted in-person meetings with staff and pitch consultants in New York and London since the start of the year. The companies were “positive and transparent,” according to Greg Paull, co-founder of R3 Worldwide, a pitch consultancy, but he warned clients still have concerns.
“Clients are a combination of frustrated and interested at the same time,” Paull said. “This [deal] is moving like molasses for some of them. We’ve been in a number of holdco reviews recently where we’ve been told by the holdcos to treat them separately but there’s still a mindset from the clients of, ‘If this is likely to happen, what’s going to be the impact for them?’”
Pattisall said client relations were key: “The two areas to watch during integration are conflicts between clients or industries and distractions. The former is known and each company is in discussion with their clients to resolve conflict concerns. The latter is a more significant issue in that a sluggish integration could distract from client delivery.”
Omnicom and IPG have been cutting US jobs ahead of merger
Omnicom and IPG employed about 74,900 and 53,300, respectively, or just over 128,000 globally, at the end of 2024. Their combined headcount dropped by about 5,000 last year, including the impact of acquisitions and disposals.
Their US employee base was especially hard hit as both companies sought savings. Omnicom’s staff fell by 2,800 to 21,900 in its home market, partly as it moved roles to lower-cost centres in Latin America. IPG’s domestic headcount dropped by 2,700 to 21,100, partly because of disposals, including Huge, and client losses such as Pfizer.
The companies discussed the combined group having only “over 100,000 practitioners.” Wren and Krakowsky have stressed they are looking to protect “revenue-generating” and “client-facing” roles, but they have also signalled they expect to “offshore” more jobs to cheaper locations.
Buhlmann warned against what he called a “drawn-out, slow rationalisation” and said it was important to move “quickly” to make major changes to ensure a successful integration.
Norman added the merger would allow the new Omnicom to reshape the business and use its greater scale to attract talent as well as invest in technology. “They’ve got the opportunity to downsize and upskill,” he said, speculating that the company might look to find closer to $1 billion in efficiencies and then invest $250 million in new talent and recruiting from rivals.
Importance of execution
Ultimately, the success of the Omnicom-IPG deal will depend on execution. Wren, the CEO since 1997, previously told Campaign at the time of the deal announcement in December that he expects to stay in the role for three years—with Krakowksy, who has been CEO of IPG since 2021, moving to be co-chief operating officer, alongside Omnicom’s COO, Daryl Simm.
Buhlmann said: “They’re in a perfect position to define a strategy that can change the market.” But relying on scale alone is not enough. “If you don’t do anything, you remain a super-tanker, and if you tie two super-tankers together, you don’t get a speedboat.”
Omnicom will need to leverage its new scale—whether in talent, media, creative, technology or artificial intelligence. “If you have that scale of resource, people and media and you work out how you leverage it to your competitive advantage, you have a real proposition you can take to market,” Buhlmann said, adding rivals will also be looking to exploit the upheaval.
“Disruption in the advertising sector, largely through technology, has always enabled new players to grow, innovative businesses to take market share and independents to penetrate the holdcos, who are often slower and suffer from inertia. Disruption is a big leveller. ”
Perhaps the greatest challenge for both Omnicom and the wider agency sector is to find more stable and recurring sources of revenue and rely less on classic advertising agency services — an area where Publicis has been leading the market, especially in the US, where it generates close to 60% of its revenues.
“The marketing agency industry is mature and primarily follows a service model for commercial relationships,” Pattisall said. “The prevalence of technology and investments in agency tech creates the opportunity to craft a new commercial model that includes software as a service [SaaS] and other services. This shift will be slow but an important one for an industry mired in single-digit growth.”
The real hard work for Omnicom may only begin after the takeover of IPG completes.
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