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Has the ad biz gotten so big it’s bad? 9 say yes; 5 no; 1 maybe

Posted on August 02, 2013 by Rob Petersen

 

 

Omnicom - Publicis merger

“How big can we get before we get bad?” asked legendary ad executive Jay Chiat of his agency, Chiat Day, in the 1980’s.

Chiat Day doesn’t exist anymore. It was acquired by TBWA, which is a part of the Omnicom Group, which doesn’t exist anymore, because it is now merged and is called the Publicis Omnicom Group.

Last week, after decades of buying up boutique firms, the advertising conglomerates Omnicom Group and Publicis Groupe decided two heads are better than one. They merged to create the world’s biggest family of agencies, with a stock market value of $35.1 billion and more than 130,000 employees.

Raising the question again: “How big can we get before we get bad?”

What’s the answer? 16 experts weigh-in. Has the ad biz gotten so big it’s bad? 9 say yes; 5 say no; 1 says maybe.

IT’S BAD

  • Bigger is not better – today, when clients are hyper-focused on ROI, efficiencies, true expertise and agility rather than sheer bulk – Dr. Augustine Fou, Digital Consigliere at Marketing Science Consulting Group, Inc.
  • Bigger companies might result in bigger efficiencies, but they don’t necessarily result in bigger or better creative ideas. Acting like a startup, leanness and agility have become the mantras of the marketing world – Arwa Mahdawi, Strategy Director, Contagious Communications
  • I’m not sure this is in the best interests of their clients or their talent. Clients today want us to be faster, more agile, more nimble and more entrepreneurial, not bigger and more bureaucratic and more complex – David Jones, CEO, Havas
  • This move is about enhancing profit margins for conglomerates, not improving results for clients – Adam Kleinberg, CEO, Traction
  • It’s going to affect, negatively, the smaller brands because the smaller brands are going to be less important to the corporate holding company –  Larry Chiagouris, Professor, Pace University
  •  There will be downsizing, synergies, and cost cutting. As a result of that, there will be some shakedown of people and accounts – Al DiGuido, CEO, Optimus Publishing
  • I’ve read about this whole idea that they’ve merged because they want to leverage Big Data. But if you’re not leveraging Big Data within your organizations prior to the merger, you generally don’t consolidate to become better at managing technology or Big Data – Jon Morris, CEO, Rise Interactive
  • Publicis Omnicom Groupe has a fake Twitter account. It’s pretty hilarious – The Onion
  • Ad agencies now work with Google, Facebook and Twitter, but the tech companies can easily bypass the agencies to work directly with, say, Ford Motor Co. or PepsiCo Inc. – Paula Dwyer – Bloomberg News

IT’S GOOD

  • It will be a good thing, as it will particularly help the performance marketing industry, and provide greater value to clients who are seeking a more comprehensive, full-service approach to their customer acquisition needs – Peter Klein, SVP, MediaWhiz
  • Advertising firms and other service businesses typically don’t need as much debt as manufacturers or other companies that deal with physical goods – Jeff Davis, Managing Director, Mercer Capital.
  • They will also be able to leverage greater volume purchasing and more strategic relationships from the likes of Google and Facebook,” says Paul Pellman, CEO, Adometry
  • I’ll bet you $1,000 right now that within 12 months WPP will have made a major acquisition or made a major merger—just watch –  Larry Chiagouris, Professor, Pace University
  • We believe this is more about global scale and efficiency and the potential increased leverage against first-party networks, such as Facebook and Google, which could radically change the media business over the next five years –  Brian Deagan, CEO, Knotice

IT MIGHT BE GOOD (OR BAD)

  • Marketers hire agencies for innovation and creativity. Clients of Publicis and Omnicom should directly ask their agencies — “What’s in this for me?” and “How will this impact my business?” Marketers who are clients of Publicis and Omnicom, in fact, have a responsibility to have those candid conversations – Bill Duggan, EVP, Association of National Adertisers (ANA)

Which side are you on? Do you think the ad biz has gotten so big it’s bad? Is it ever likely to change? If Jay Chiat were still with us, what would he say? What would Dan Draper think? What do you think?

 

2 to “Has the ad biz gotten so big it’s bad? 9 say yes; 5 no; 1 maybe”

  1. rhonda hurwitz says:

    Your post reminded me of another category where big is definitely bad.  The mutual fund managers who by virtue of their track record accumulate more and more assets to manage almost inevitably can’t maintain their results … more money to put to work, finite number of opportunities.  I am thinking that the ad biz is a human powered business, and the creatives and strategists who put these agencies on the map still only have 24 hours a day.  I can’t see how the combination makes them better.

  2. robpetersen says:

    rhonda hurwitz Thanks Rhonda. Appreciate your input and example of another industry where bigger is not necessarily better.



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