Pharma
Omnicom and Interpublic on the Verge of Mega-Merger: New Industry Leader in the Advertising Market
The planned merger of Omnicom and Interpublic would create a new global industry leader with over 20 billion US dollars in revenue.
Omnicom Group, the number three in the global advertising market, is on the verge of acquiring Interpublic Group, the fourth largest company in the industry. According to insiders, the merger could be announced as early as this week. The transaction, valuing Interpublic at 13 to 14 billion US dollars, would create the world's leading advertising group with a combined net revenue of over 20 billion US dollars, overtaking industry leader WPP.
The merger brings prominent agencies like BBDO, McCann Worldgroup, TBWA, and Weber Shandwick under one roof. Omnicom, known for clients like Disney and PepsiCo, and Interpublic, which works for brands like L’Oréal and Johnson & Johnson, are responding to the growing dominance of tech companies like Google and Meta. These are increasingly pushing into the advertising market with AI-driven solutions, endangering traditional business models.
The advertising industry is undergoing a transformation, where automation and generative AI could upend agency structures. Forecasts suggest that by 2030, about 8% of jobs in agencies could be eliminated by AI. A merger could help both companies reposition themselves in a data- and technology-driven landscape.
Recently, Interpublic lost market shares to Publicis and WPP, including lucrative clients like Amazon and Pfizer. CEO Philippe Krakowsky actively sought strategic options, including talks with private equity firms. Additionally, internal restructuring and the sale of weaker business units have been advanced.
Omnicom has also focused on changes and invested in the e-commerce platform Flywheel. With the potential acquisition, the company could strengthen its position in the "Principal Buying" area, a lucrative segment where agencies buy, hold, and resell ad inventory.
The merger is likely to attract regulatory scrutiny as the new giant would have a dominant position in the global advertising market. Worldwide advertising spending is estimated to exceed 1.03 trillion US dollars in 2024, which would further enhance the market power of such a giant.
