Publicis-Omnicom Merger: Too Little Too Late?

Publicis Omnicom - prediction

Photographer: Scott Eells/Bloomberg.

Scientists tell us that over 1 million years ago there was an extinction event that completely wiped out the dinosaurs.

It might have been asteroids from deep space hurtling towards the earth and impacting with such force that the planet spun on it’s axis. Clouds of earth and debris blasting into the air creating clouds that engulf the earth in darkness — bringing on the age of ice.

Yesterday’s news brought the story of Publicis and Omnicom. They want to merge.

Way back in 2002, 2003, and 2004, what seems like lifetimes ago, they were buying up ad and digital media agencies in major cities across the globe — including Atlanta.

They each own many hundreds of agencies of all sizes across the world. Now they want to merge and pool their resources.

Why?

I think it’s because they are scared.

They know that there is a disruption occurring. The identified enemy is known as “The Internet” generally, and “Google” and “Facebook” specifically.

The Internet has made it possible for business owners to manage their ads and ad spends directly. They can reach buyers directly online through Google and Facebook. They can call Comcast themselves and purchase ad spaces, targeted to viewers in specific neighborhoods of the metro area, all by themselves.

Why use an ad agency?

There’s only one reason: creative.

But, the creative isn’t all that good; it doesn’t sell.

So what do business owners do? What’s going to happen?

The New Face of Advertising and Marketing

I read an article on Bloomberg titled, “Publicis-Omnicom Merger Won’t Save the Madmen” by Paula Dwyer. She makes a similar point. She doesn’t know what will happen.

I think I do.

Publicis/Omnicom is going to die a slow death.

That is, unless they innovate and redefine themselves and what they are selling. They need to answer the question, “What does the market want?”

The major mistake they are making now is to merge instead of innovating internally. The merger puts the creative departments of ad agencies hired by Coca-Cola and Pepsi under the same roof. It’s not just the cola’s, it the wireless carriers as well. AT&T, Verizon, Sprint, T-Mobile … All with the same ad agency?

The flaws in their plan are obvious!

The answer to the question, “When it comes to marketing, what do business owners and CEO’s want?” varies slightly depending upon the size of the enterprise. Generally, however, they all want to sell something.

To do that, they are going to have to create marketing campaigns with proven, effective marketing funnels, nurturing systems, conversion tracking, measurement, and optimization for continuously increasing conversions.

The problem is: business owners don’t know how to do that — and neither do ad agencies.

Who Holds the Keys to the Marketing Kingdom?

Only 3 groups of businesses know how to do that: marketing software developers, digital media agencies and direct response (advertising) copywriters.

Here’s the rub: only 20% in each segment knows what they are doing, and only 5% are consistent winners. Marketing software developers don’t know how to sell effectively and aren’t sure if what they are making is going to work for real-world businesses in the end. Digital media agencies have bought into the Social Media Fantasy. They are off in left field drinking the kool-aid and making popcorn necklaces. Even then, only 15-20% of them know what they are doing when it comes to funnels, systems, tracking, measurement, and optimization.

Similarly, most copywriters are … well, they wouldn’t qualify as direct response copywriters. Only 15-20% of copywriters could be called direct response copywriters. The main qualifications: the ability to sell and to enthrall. This qualifies these elite few direct response copywriters, like us,  as marketing consultants.

Business owners, CEO’s and board members want to grow a business for one purpose: to make money.

Publicis and Omnicom’s purpose was to sell ad space and creative and make a profit on both. They were interested in awards and parties, extravagance, and control of access to the media and thus control of access to the consumers. But every industry is either being renovated by market forces, or re-invented by industry leaders with visions — like Steve Jobs — and they are using the Internet and traditional media to reach their consumers and build billion dollar brands.

Marketing is going to be moving in-house instead of outsourced. Companies of all sizes will be taking on more and more of their own marketing. That’s the only way they can track it, measure it, and optimize it. Sure, there may be design shops around who essentially reformat and add pictures to annual reports, but full control of marketing will move into businesses marketing departments.

There, they can fully track, measure, and optimize their marketing, and they can bridge the gap between their sales and marketing departments — thus creating true inbound and outbound marketing funnels.

Then businesses will learn their markets inside and out. They will become companies of specialists who know a certain market so intimately that they can almost read the minds of the consumers in those markets.

They will rely on marketing consultants like us who know marketing so deeply that they will assist with creative, marketing funnel development, and consumer psychology. Then, if need be, the new agencies, like us, will train the businesses on effective ways to use the new technologies in their marketing efforts.

The Future for Publicis/Omnicom is Bleak

How did the dinosaurs disappear? Did they die quickly, or did they slowly waste away — after the sky darkened and the earth shook. After the chills came, all things slowly began to fade away.

It may have taken 5 or 10 years, but it happened because the dinosaurs couldn’t adapt.

The same will hold true for Publicis /Omnicom. Their only hope is adaptation and innovation. If they don’t, they will die a long, slow, painful death.

What Do You Think?

Let me know what you think. Enter your comments below. If you are a business owner, tell me what concerns you. How are you finding business? If you are an ad guy or girl, what’s going through your mind? Are you looking for work, or striking out on your own? Or do you think you can pull it out of the fire and save the modern ad agency from its apparent demise?

About Michael Miller

Michael Miller is the owner of Mindwhirl.com, a sales and marketing coaching and training company in Atlanta, Georgia.

Michael’s mission is helping small business owners understand, and organize their marketing so they can make money and grow.

Mindwhirl helps business owners plan and implement effective, profitable marketing campaigns and sales programs.

If you need more sales, we know how to get leads and grow businesses. Call us today at (404) 858-3105, or email me at mmiller@mindwhirl.com.

Leave a Comment

*