Sectors: Creative, Media & Technology

As advertising’s leaders of the pack report similarly strong 2024 financials, Barry Dudley decodes their earnings calls and explains how their journeys will drastically diverge in 2025. Given its strong performance over the previous three quarters, it probably comes as no surprise to hear that Publicis continued that momentum in Q4. Indeed, it came in ahead of its own guidance. Arthur Sadoun, chairman and CEO, said: “Thanks to a very strong Q4, Publicis became the largest advertising company in the world in 2024. “We are ending the year in the number one position across the board, growing three times faster than our holding company peers, and five times faster than the IT consultancies. We delivered industry-high financial ratios while stepping up the pace of our investments in AI and talent. Once again, we topped the charts in new business rankings. “But even more importantly, we are accelerating on our status as a Category of One thanks to our unmatched 1st-party data capabilities, our connected media ecosystem, our creative firepower, and our 25,000 engineers, brought together through the Power of One. This makes us confident in significantly outperforming the industry in 2025 for the sixth year in a row.” The key numbers for the year to December 31, 2024: net revenue of €14bn, 5.8% organic net revenue growth, with operating profit of $2.5bn at a margin of 18%. That margin is impressive. Very impressive in fact, given its sheer scale, levels of infrastructure, the investments it’s making in its people, data, AI, technology, the list goes on. So, for those young, fleet-of-foot, dynamic independents out there an 18% margin must be a walk in the park to achieve – are you? Sadoun went on to set out what he sees as the unique competitive advantages that have put Publicis in the “number one” spot:

• “Leadership in first-party and proprietary data”“Thanks to AI we connect this data to our entire media ecosystem and intelligent creativity”
• “Thanks to AI we connect this data to our entire media ecosystem and intelligent creativity”
• “We have 25,000 engineers and consultants … to make sure our clients can integrate those capabilities into their own environments and transform their business model”
• “We operate as an efficient and flexible single platform organization thanks to the Power of One, Marcel and our Country Model to make all of this data and technology seamlessly accessible to all off our clients and teams”

A pretty powerful framework. if you head up to 30,000 feet, what is your equivalent articulation of your competitive advantage(s)? Part of what has driven Publicis, for decades now, has been chasing down the biggest in the pack – WPP. Having an enemy, a Goliath to your David, is very commonly what drives people, drives businesses. This has been the environment that Publicis has been playing within, evolving, looking for new angles, markets, advantages. Now it is the Goliath, or perhaps it’s Leo the Lion. So what’s the goal now? Well, assuming that regulatory hurdles don’t trip up the Omnicom takeover of Interpublic, Publicis shifts back to number two (in terms of revenues). Sadoun is already relishing the hunt for the new Goliath – “this puts Publicis back into the challenger position, which is where we like to be.” But he’s not rushing around trying to find a big lump to quickly fatten the numbers. Instead, Publicis is pointing to its €800m to €900m acquisition budget for ‘bolt ons’. This means buying strategically to enhance what it already has, to bolt things on to existing operations in some very specific areas: first-party data, production, digital media, technology – quite a spectrum. And Sadoun isn’t about to put a banana skin in front of himself at the start of the year – his outlook is for 4% to 5% organic net revenue growth, which is slightly down on 2024. I’d bet on Publicis beating this range, but this old adage still works – under-promise, over-deliver! Later the same day Omnicom’s results landed. It also had a strong year with $15.7bn of revenues, with organic growth of 5.2% over 2023 (the Publicis numbers above were on net revenue, so not quite apples and apples), and an EBITA margin of 15.5% (again not quite a comparison to Publicis – EBITA v operating margin). And the guidance for 2025 sounded familiar at 3.5% to 4.5% organic growth – under-promise, over-deliver. John Wren, chairman and CEO, said: “From this position of strength, we are incredibly well prepared for and excited about the complementary combination of businesses and cultures with our proposed acquisition of Interpublic. Together, clients and employees will benefit from expanded products to deliver superior creativity, innovation and effectiveness. We will also bring together unparalleled data assets to market, fueling leading creative, produced at scale, and activated by the world’s top-ranked media practice to drive measurable sales. We see significant upside potential through expected revenue and cost synergies that can drive growth beyond what Omnicom was delivering alone.” There were winners and losers across the different service lines and also by geography, but for me there were more interesting things that emerged. During the results webcast, Wren unsurprisingly spent most of his time on the Interpublic takeover, a big part of which was around the $750m of annual cost synergies that it is expecting to achieve if the deal goes through. And he sees more synergies on top of these through revenue opportunities, leveraging near and offshore capabilities and utilizing automation, including AI. Wren was keen to make clear that headcount savings “will not impact employees dedicated to servicing our clients and generating revenues.” I can imagine quite a few people trying to work out whether they fit into this definition… And where there is duplication or for people who aren’t ‘dedicated to servicing our clients and generating revenues,’ they will choose “the best individuals across the organization, irrespective of their current affiliation.” These are going to be very uncertain times for people, which will be one of the biggest challenges in the coming months. Shareholder approval is set for March 18, but the deal won’t close until the second half of 2025. Until then, Wren said that they will “continue to operate as independent businesses.” This is one hell of a lot of internal work, spreadsheets, integration planning, legal loopholes to crack. All while Publicis is practicing with its sling to take aim at the coming Goliath. Read more

From Getty acquiring Shutterstock to Bauer buying Clear Channel and Publicis bringing together Leo Burnett Global and Publicis Worldwide, it’s been a busy start to the year for M&A. Green Square’s Tony Walford tells us what to expect in the weeks and months ahead. What a start to 2025! Trump back in, economic and political turmoil in the UK, France and Germany and the Middle East (but hopefully now resolved) and Russia-Ukraine continuing to present challenges, albeit Trump reckons he can fix the latter in a stroke. Given this background, it’s understandable to anticipate a slowdown in investment and M&A whilst people wait to see what the US administration will bring and also how the UK economy pans out. That said, hot on the heels of the Omnicom-IPG announcement at the very back end of 2024, this year started with a couple of significant acquisitions. Getty is acquiring Shutterstock in a merger that will value the combined company at $3.7bn and Bauer is buying Clear Channel Europe-North for $625m. Given current global macroeconomic uncertainty, the question is whether the nature of these three deals points to a potential trend in M&A for the coming year. While trying to predict this year’s theme so early on would only set me up to look a fool (no comments please), there is a common thread across these three transactions, which is consolidation. And as I write, the news of Leo Burnett and Publicis Worldwide coming together under the name Leo is reverberating – it’s not M&A, but it’s certainly consolidation. There’s been plenty of press comment around Omnicom-IPG and its proposed restructuring, so there’s no need to repeat that here. That’s consolidation in its purest form in an increasingly competitive and changing market… two legacy global networks huddling together to keep warm, cutting costs and aiming to knock Publicis off its recently claimed position as ‘Top Dog’ (while the Top Dog itself begins internal huddling together under Leo). So, let’s concentrate on the Getty and Bauer deals. First, Getty-Shutterstock is about controlling more of an already declining image market, protecting its position through cutting costs (estimated annual savings are up to $200m after three years) and facing up to the threat that AI image generation brings. The combined entity will control nearly half of the global image market with a massive library of approximately one billion stock images, videos, GIFs and the like. Image prices are being driven down, photographers are (sadly) being paid less and the market has become commoditised. On the face of it, this replicates the Kwik-Save store mentality of the 1980s, “pile it high and sell it cheap,” but generative AI tools, such as Midjourney and OpenAI’s Dall-E, are major threats to the traditional image market. Getty is not only trying to consolidate its position as the place to go by offering a broader and deeper content library, but wants to outpace competitors by developing its own AI-powered tools for image search, editing and generation. It hopes that its vast, merged combined repository will provide the biggest pool in the world to train its machine learning tools on. In comparison, while Bauer-Clear Channel is also about consolidating across media platforms, it’s not simply about size, market share and defensiveness. Bauer has a suite of media assets in magazines, including Grazia and Heat, and radio with Absolute, Magic and Kiss to name just a few. By adding out-of-home it significantly extends its offering to advertisers and the opportunity to seamlessly sell media across a broader set of formats. It’s interesting that in buying the North European elements of Clear Channel, Bauer has stuck to its local markets – those which it understands. It already operates in 7 of the 12 markets Clear Channel brings, so there’s a degree of risk mitigation, which brings me on to another point – trust. Trust in news media is being eroded. There’s a constant onslaught of political influence across the various news platforms, some much more biased than others. Not to mention Elon Musk using his own platform, X, to have a pop at the UK’s Labour government as well as Nigel Farage (who must be particularly sore, given his prior constant praise for the guy). With polar-opposite opinions and spins being put on our ‘news’, and out-of-context comments and fake imagery being broadcast globally, people no longer know what to believe. The cancel culture still exists, but people are becoming a bit more suspicious of the information that’s being doled out and less knee-jerky before making a decision. And if the public is trusting news media less and less, how does this translate into the trust people place in those brands that advertise on it? One of our Green Square client alumni, Jack Horner (formerly of FRUKT, which Green Square sold to IPG, and now a founder of local media specialist, Nearfield), suggests local media news is considered far more authentic. While it tends to be “local news for local people,” the proximity of the matters being reported means it’s far more likely that fake news will be called out and local news platforms are hugely at risk should they lose trust. When something major happens locally, for example the dreadful fires in California, I can’t imagine residents would choose CNN or Fox over the Los Angeles Times to get a more detailed picture of what is happening. In turn, this trust in local media can extend to advertisers. We all know brands must earn trust, but being seen in a place where authenticity already exists is a good start. It could be deemed smart to shift a more sizable element of advertising and events budgets to regional media outlets, allowing brands to connect and engage with local communities, in turn garnering more trust, loyalty and ultimately becoming part of their ecosystem. Out-of-home, or local radio, seem pretty smart places to be. Another fear for brands is one where their adverts appear next to inappropriate or extreme content. In a world where media trust is diminishing, has this risk shifted to brands potentially being seen as inauthentic depending on their media placement? Again, out-of-home, or local radio seem pretty smart places to be… As an aside, the LA Times is owned by billionaire entrepreneur Patrick Soon-Shiong, who also owns the San Diego Union Tribune and other California news outlets. He acquired them with the specific intention of bringing more “fair and balanced” news, representing all views and, in late 2024, he controversially prevented the paper endorsing a single election candidate (in this case, Kamala Harris). He also fired the entire board in his ongoing quest to “restore balance.” Whichever way you look at it, given the size of the readership, this is local media at scale. Coming back to the outlook for 2025, while in tricky times we tend to see consolidation, my wish-list for this year includes it being about restoring trust, particularly in media content. The purpose, ESG and diversity agendas have rightly had most prominence in recent times, but what use is purpose without trust? It will be a shame if this year ends up being mostly about consolidation in an increasingly unstable world. M&A should be all about gaining complementary skills and services, which improve and extend client offerings, not just offering more of the same. That’s boring. Bigger isn’t better. Better is better, and the best acquisitions are those that augment people’s lives in some way. I’d like to think as we specifically look toward content that shapes so much of our day-to-day decision making, trust and authenticity will be higher on the agenda when looking at M&A. Read more

Discussing the evolution of the business since its merging with the global consultancy, chief executive Chris Mellish outlines why Unlimited is only just getting started. UNLIMITED is riding the crest of a wave right now, and there are no signs of that slowing down anytime soon. The business has just picked up the McDonald’s customer relationship management account for the UK and Ireland, continuing a hot streak on the new business front. The group consists of integrated creative agency TMW, Walnut, UNLIMITED’s market research agency, B2B communications and content marketing agency, Nelson Bostock, and healthcare comms agency Health Unlimited. UNLIMITED is being integrated to scale Accenture Song’s Al abilities and underline its evolving creative credentials. Until early this year, a case could be made for the group being unintentionally one of the best-kept secrets in the advertising community despite it being 38 years old, employing over 600 people, winning numerous awards and working for clients such as the Cabinet Office, Canon and Vodafone. Last year, TMW alone won 24 pitches, totaling £7.9 million in new revenue, including Suzuki, Oak Furnitureland, People’s Postcode Lottery and Rail Delivery Group. But in April, things certainly changed when the group was acquired by one of the world’s largest business consultancies, Accenture, to become part of its creative arm, Accenture Song, which has heightened its new business pipeline even further due to its substantially strengthened offer. Tony Walford, founder of Green Square which handles mergers and acquisitions, describes the deal as having “a smart rationale” that will bring “specialist elements to Accenture Song’s broader offer.” Now, the group sits proudly alongside major agency names such as Droga5. Within just six months the acquisition has already begun to bear fruit having just won McDonald’s CRM account, something it would have been unlikely to have achieved without the collective might of its new parent company. Michelle Graham-Clare, CMO UK and Ireland for McDonald’s UK and Ireland says of the hire: “TMW demonstrated a true passion for our brand. Their use of customer data, strategic thinking, as well as creativity was exceptional and we look forward to utilising this partnership as a way to build world-class CRM that delights our customers at every touchpoint.”

Ambitious Leadership

Chris Mellish, group chief executive of UNLIMITED, sees the move as part of the leadership team’s collective drive to take on the traditional agency networks from which many of them have heralded. Mellish, who always comes across as a calm and approachable leader, has a great ambition for UNLIMITED’s progress. A former president of BIMA, Mellish has spent more than two decades developing digital marketing solutions. He joined the business in 2019 from Razorfish where he spent 14 years, to become the chief executive of TMW before being promoted to lead UNLIMITED last year. UNLIMITED has a clear point of difference, he believes, through its modern integrated offer alongside its deeper understanding of consumers through behavioural and neuroscience as part of its Human Understanding Lab launched in 2022. “Five years ago, we made the decision to put PhD-level thinking at the heart of everything we do and combine that with our unique perspective on integrating the customer journey. It’s really struck a chord with the market and we’ve seen an incredible period of growth.” That has been exemplified in Accenture Song being named on McDonald’s CRM Agency Roster, with TMW leading the pitch in the UK and Ireland, subsequently becoming the first agency appointed as part of the global roster review. Accenture offered scale and expertise to support the process, but TMW led on both creative and strategy. Mellish explains that the proposition around “true integration” was something he held a strong belief in when it came to delivering stronger customer engagement calendars “more inspiring” and integrated campaigns “more effective” for clients. Now, he feels that is self- evident following the positive response by the McDonald’s team. “This was our first opportunity to pitch alongside the rest of the Accenture Song, and it has demonstrated immediately the scale and potency that we have added to each other’s offerings,” he continues.

Break On Through

Debut campaigns for new clients have been released in recent months, showcasing an evolution in strength. That included TMW’s first work for Suzuki offering a very different type of car ad. Its campaign was designed to help the Suzuki Swift stand out against ‘increasingly formulaic ads’, presenting the different lengths that owners would go to just to keep the car from growing in popularity. The creative agency also supported the launch of on demand TV service Freely, from BBC, ITV, Channel 4, and Channel 5 and the “Enhance Performance, Legally” campaign for sports nutrition brand Bulk which proved deliberately provocative. Elsewhere, through its long-standing consortium with Pablo, the first campaign was released to help ‘humanise’ HMRC under the ‘You’re On It’ platform. Released in November, it highlights the British tax authority’s ambition to increase the number of users of its app to six million people. That consortium was also appointed to take on the Government’s key climate account earlier this year. Described as “The Breakthrough Agenda” it saw UNLIMITED beat out rostered agencies on the Government communications framework to be appointed as the agency of record for The Department for Energy Security and Net Zero‘s initiative, which aims to strengthen international collaborations around clean technology development and sustainable solutions. The brief includes website design and development, social strategy, and content creation and PR around key periods, managed by bespoke specialists across the network agencies, including TMWX, TMW Tomorrow and Nelson Bostock. Mellish believes that clients have bought into how it helps brands manage their communications efficiently and effectively through a simple ‘honed down’ approach that they understand, while the positive culture around the business that talked about driving performance and effectiveness also resonated. And now his challenge is to integrate that all within Accenture Song while building scale, without losing those core, appealing strengths. “Together, we are building a new agency model that enhances our ability to deliver comprehensive, elevated solutions that better serve our client’s evolving needs,” he states enthusiastically.” Mellish is relishing taking the offer and working alongside the established parts of Accenture Song to move beyond its UK-centric footprint and build further. He describes the breadth of the business as “enormous” – a word he also uses to describe the new opportunities. With Accenture’s backing, UNLIMITED has also considerably strengthened its technological capabilities. “The most topical example is probably AI, where billions are being invested, and the breadth and depth of expertise throughout Accenture is incredible. Since becoming part of Song, we’re now lucky to have access to world-leading experts across every specialism or technology you could ever think of.” Subsequently, Mellish is now part of the Accenture Song leadership team reporting into Sohel Aziz, the managing director for UK, Ireland and Africa.

Clear Signs Of Progress

The McDonald’s win is a clear sign of UNLIMITED’s progress as it competes for what Mellish sees as being “more innovative briefs” with the Accenture Song fold. He sees bigger brands and a bigger scale prove exciting for the team, with early evidence that the mix is working. “We’ve had a huge wave of success over the past few years, but we’re now working on certain briefs that we simply wouldn’t have seen before. It’s exciting thar our big ambitions have started to become reality almost immediately. McDonald’s is the perfect case in point. The response from staff has been amazing – our employee engagement numbers have got even better this year.” Speaking to Creative Salon when the acquisition was announced in April, Dame Annette King said that UNLIMITED had proven in recent years to be “one of the industry’s strongest offerings across the board.” She continues: “Their capabilities and expertise have driven incredible performance for their clients – all of which has been underpinned by a culture where people genuinely love where they work and are proud of the work they put out in the world. Their unique skill sets are complementary to what we already have at Song but what was evident from the outset was how these could be supercharged by what we do. Particularly when it comes to our Gen Al offering that we know is a central focus for clients everywhere.” Moving forward, Mellish intends to ensure that more brands experience the capabilities of the group. “We’ve already built an approach that drives both great creativity and real business results for our clients. With this bigger platform, I’m excited that many more brands will get the opportunity to see that firsthand.”  

2024 was bookended by two Omnicom deals – Flywheel in January and Interpublic in December – which got us all excited. Green Square’s Tony Walford explains why he expects a lot more M&A excitement in 2025. It’s been a relatively slow couple of years for M&A globally, with the UK and North America displaying a general trend of decline from the peak levels seen in 2021. That said, there’s lots to be positive about as we enter 2025. First, why the decline? In a nutshell, economic and geopolitical uncertainty. Inflation increased globally from late 2021 and continued to persistently rise and remained high (above 5% in the case of the UK) until recently. Central banks hiked interest rates to bring inflation back under control, leading to increased cost of debt, which the majority of acquirers rely on to finance transactions. Couple this fundamental financing stranglehold with major global conflicts, fears of a global recession, 2024 elections in the UK and the US, and an indication from the new UK chancellor that Capital Gains Tax (CGT) rates would dramatically increase, and you have the perfect storm. Buyers became more selective and offered lower valuations, with sellers reluctant to accept these valuations, particularly given CGT fears at the time. Whilst we saw a flurry of UK transactions closing prior to the budget, and some that missed the deadline completing shortly after, there has still been a significant reduction in deal volumes over the last couple of years.

Falling inflation and interest rates

So, what about M&A in 2025? The consensus view, supported by us at Green Square, is we’re in for a very busy year as we see the factors that drove the reduction in activity start to reverse. Most notably, inflation has reduced and thus interest rates are slowly coming down and this is expected to continue into 2025. Putting aside growth and political issues in France and Germany, the UK and US are seeing some recovery and economic optimism is improving, even though we are yet to see what the second Trump administration will do. Private Equity is sitting on a lot of cash which it needs to either deploy or give back to investors, with spending clearly being their preference. On top of this, PE firms typically hold investments for 3-5 years and, due to the relative lack of activity over the last couple of years, many are holding investments at the latter end of this timeline which they need to offload. Thus, we can expect to see plenty of PE disposals in the coming year. Then there are those agencies that wanted to sell in 2024 but decided to hold off for all the reasons stated above. Time waits for no one and, with the increase in UK CGT being lower than expected (at least for the time being), there’s a lot of pent-up shareholders looking to realize value. Put all this together and you have funding costs coming down, more businesses coming to market and the gap between buyer pricing and seller expectations narrowing. Hence our forward-looking positivity. In terms of our marketing services universe, we saw a diverse crowd of acquirers in 2024 with PE-backed outfits tending to be the most prevalent. The global networks were fairly quiet, focussing on infills where they lacked a specific skillset rather than statement transactions, aside from the just-announced Omnicom IPG, Valtech buying Kin+Carta, Publicis acquiring commerce specialist, Mars United, and LDC-backed MSQ doubling its presence in the US with SPCSHP. Management consultancies were also relatively inactive, with the exception of Accenture buying Unlimited.

Key M&A areas in 2024

Whilst the market was somewhat muted, certain marketing specialisms saw greater M&A activity in 2024, with key areas of interest as follows: PR. This was possibly the most active discipline for acquisitions with a mix of consolidation, disposals, MBO’s and new entrants. We saw WPP merge its Hill & Knowlton and BCW agencies to create Burson, whilst offloading its majority stake in FGS Global in a $1.7bn deal to KKR. Publicis acquired Influential, the world’s largest Influencer agency, whilst Havas also got in on the act buying the somewhat smaller Wilderness. Bully Pulpit (BPI) was a new entrant to the UK market, acquiring Seven Hills and Message House, making the UK BPI’s biggest European market and next largest outside the US and Public Affairs holding company PPHC bought UK government relations firm, Pagefield, another first step for a US firm into the UK. Healthcare marketing transactions didn’t disappoint and, despite some big pharma woes resulting in less marketing spend, transaction activity remained strong. This was primarily across the more scientific areas of market access and regulatory compliance, with PE-backed Clinigen acquiring Ascencian and Kinesys, but momentum remained across the more general medical branding and communications spectrum with some decent-sized transactions, such as IQVIA acquiring Ceuta, together with many smaller agencies including BioStrata and AKT also realizing value. Digital, as always, was another key area, the most notable deal being PE outfit ECI buying Croud from LDC, but we also saw MSQ buy 350-person German CX agency UDG. As expected, AI is fast becoming the hottest area with US digital engineering and AI enabler EPAM acquiring First Derivative, Blackstone-backed HH Global buying Northell Partners and Healthcare specialist Real Chemistry buying Avant for its AI-driven insights and marketing expertise. There were also many transactions across Social, Data analytics, Performance and e-commerce, all areas which continue to be in high demand. Events and Experiential has seen a significant bounceback over the last couple of years post-COVID as the smarter players shifted their proposition to digital alongside physical engagement during that period. There’s been high interest in areas which involve people interaction as brands strive to get ever closer to their consumers, be it B2B, B2C or D2C. 2024 saw PE-backed ImpactXM buy Matrex in the US and reach out to the UK for the first time in acquiring Enigma. This is a buyer to watch in the Experiential space as it looks to build out from its North American heartland. Stagwell continued its acquisition march, augmenting its experiential positioning in buying Sidekick (a Green Square transaction), and UK-based major Experiential independent, DRPG, bought North Carolina’s Special Events. Retail, e-commerce and Shopper has also had a resurgence, as indicated by the Publicis Mars deal mentioned earlier. We saw Acosta buying Dee Set, Product Connections and Crossmark, and Quad entering the In-store retail media market with its acquisition of DART. French Retail Marketing specialist, Altavia, expanded its overseas offering with acquisitions in Casablanca (D-Aim) and Singapore (ielo design). Read more

As the global ad industry adjusts to there now being five global advertising holding companies instead of six, Green Square’s Barry Dudley asks what the absence of words such as ‘advertising,’ ‘creative,’ and ‘strategy’ might tell us about where Omnicom is heading. Although there have been all sorts of rumblings and rumors for some time, Omnicom is actually going to acquire IPG – subject to regulatory approval. It is a ‘stock-for-stock’ transaction, meaning that IPG shareholders will sell their shares in exchange for shares in Omnicom. So, despite lots of heady numbers, no cash is changing hands. As the joint press release states: “Interpublic shareholders will receive 0.344 Omnicom shares for each share of Interpublic common stock they own.” Based on Omnicom’s share price at its last close ($103.43) this equates to $35.58 per share. IPG’s share price at its previous close was $29.26, so there has been a fairly hefty premium offered. The release went on to say: “Following the close of the transaction, Omnicom shareholders will own 60.6% of the combined company and Interpublic shareholders will own 39.4%, on a fully diluted basis.” This shows the relative sizes of the businesses. What did the markets think? Not unsurprisingly, IPG’s share price has jumped – initially to $32.90 and then settling back to $30.30 by the end of the day’s trading. Conversely, Omnicom’s shares closed the day down 10.25% at $92.82, taking around $2bn off its value. Is that because the market thinks Omnicom is overpaying, or it just doesn’t think it is a smart deal? Here’s what the respective CEOs had to say… “This strategic acquisition creates significant value for both sets of shareholders by combining world-class, highly complementary data and technology platforms enabling new offerings to better serve our clients and drive growth,” said Omnicom’s John Wren. “Through this combination, we are poised to accelerate innovation and harness the significant opportunities created by new technologies in this era of exponential change. Now is the perfect time to bring together our technologies, capabilities, talent and geographic footprints to bring clients superior, data-driven outcomes. We are excited to welcome Philippe and the entire Interpublic team to the Omnicom family.” His Interpublic counterpart Philippe Krakowsky put it like this: “This combination represents a tremendous strategic opportunity for our stakeholders, amplifying our investments in platform capabilities and talent as part of a more expansive network. Our two companies have highly complementary offerings, geographic presence and cultures. We also share a foundational belief in the power of ideas, enabled by technology and data. By joining Omnicom, we are creating a uniquely comprehensive portfolio of services that will make us the most powerful marketing and sales partner in a world that’s changing at speed. We look forward to working with John and the entire Omnicom team.” Picking out a few words and phrases – “highly complementary data and technology platforms,” “new technologies, data-driven outcomes,” “platform capabilities,” and “enabled by technology and data” – it’s pretty clear where they are planning to take the combined business, although I was quite surprised not to see a single reference to AI. Without doubt IPG’s Acxiom (Audience Solutions, Data and Decision Sciences) and Omnicom’s Flywheel Digital (Digital Commerce) are going to be central. While Flywheel is a relatively recent acquisition for Omnicom (2023), IPG acquired Acxiom in 2018 so it has been embedded into the group: “IPG’s OPEN architecture approach flexes to what brands need, bringing our wide capabilities across over 74 agencies with Acxiom’s Customer Intelligence Cloud capabilities to help brands and people, win.” And then a few words that are conspicuous by their absence: advertising, creative, strategy. There was mention of “innovation” and the “power of ideas,” but the bedrock brands that have stood front and center of these groups for many years appear to be heading to the back seats –BBDO, FCB, McCann, MullenLowe, TBWA et al. There were a good few mentions of the “talent”. IPG’s website claims ‘approximately 55,000 employees’ and Omnicom has ‘70k+ people’. By my maths that’s 125,000 in total. According to the press release, the ‘new Omnicom will have over 100,000 expert practitioners’. There’s quite a difference between these two numbers, which will be partly explained by non-practitioners, the back office. But the ‘annual cost synergies of $750m’ will undoubtedly involve a significant proportion relating to headcount reduction. That’s a pretty unpleasant thing to have surrounding you at this time of year. And where will the clients end up in all of this? They will undoubtedly have more tools, platforms and data to play with, but I can’t help thinking that client service is going to suffer. So as the mega groups morph towards wannabe Metas and Amazons, the opportunity for smaller players to emerge and capture the ear and the wallet of clients is going to grow, with a wave of people stepping away (or being jettisoned). I also expect to see some exciting startups emerge. My colleague Tony Walford wrote just a few days ago about Publicis becoming the biggest marketing services group by revenue. I wonder what Sadoun and Snoop Dogg have up their sleeves as their next move… WPP maybe? Read more

Publicis ends 2024 on a high as it becomes the largest holding company in the world for the first time in its history. Green Square’s Tony Walford analyzes why 2024 has been fantastique for Arthur Sadoun and his team. Every year Publicis’ inimitable CEO Arthur Sadoun puts out a pre-Christmas short film to all staff thanking them for their global contribution called the “Wishes”. It’s quite something, and 2023 saw each of its 100,000 staff being sent a personal video created in AI with Arthur featuring his digital twin. Yesterday saw the release of the 2024 “Wishes” in which Snoop Dogg, or “Le Snoop” as he rebrands himself in the piece, announces Publicis as global Top Dog. The end of this year is very likely to see Publicis as the largest agency network in the world, with its €13.9bn revenue forecast edging ahead of WPP, which has worn the global revenue crown for the last couple of decades. The film is very amusing. The French love Snoop, so this is a smart choice particularly on the back of the Olympics, and features Sadoun unsuccessfully trying to do the C-Walk, ending with a cameo of former CEO and industry legend, Maurice Levy, on a balcony showing everyone how it should actually be done. Sadoun is a very charismatic leader, as was Levy before him, and his enthusiasm is always a joy to watch (even in boring old investor presentations). But putting that aside, how did Publicis achieve this lofty height historically dominated by WPP for so long? The first thing that sprung to mind was a piece I wrote in a coffee bar in Amsterdam back in 2018 (the morning after giving an evening M&A seminar for The Drum) about how Publicis was leading the charge by simplifying its offer around the “Power of One”. It’s funny how specific moments and places in time trigger a memory and, given where I wrote it (which was after a very late night with The Drum team), I was a bit worried how it would read when I went back to it today! It finishes with the line “Power of One seems to be not just another vacuous corporate restructuring exercise, rather a genuine attempt to create a new model that will see the whole group face its clients in a very different way going forward”. Fast-forward six years (me with a lot less hair, but Arthur only shifting from black to grey), and it’s clear this focus has paid enormous dividends. Don’t get me wrong; all the networks have embraced the need to change how they operate, with Mark Read at WPP being particularly voracious in merging the biggest agencies in that group, but Publicis was at the forefront of this paradigm shift. However, it’s one thing to talk about the Power of One, and another to deliver it. And is this why revenues have grown so much? M&A has actually played a major part, with Publicis making several very large strategic acquisitions to strengthen its position in key areas. A significant moment was the $4.4bn acquisition of Epsilon in 2019, bringing the group valuable consumer data and AI capabilities which have become a fundamental part of Publicis’s offer. This sizable deal followed its bold $3.7bn acquisition of Sapient in 2015, which it merged with Razorfish (remember that?), to create Publicis Sapient and kickstart Levy and Sadoun’s “Power of One” strategy. While this year has been relatively quiet for holding company M&A, with PE-backed outfits and the challenger group Stagwell being more active, 2024 saw Publicis make two further significant moves. The first was its acquisition of Influential, the largest global influencer marketing company by revenue, giving it access to over 3 million creators and 90% of global influencers with more than 1 million followers. Publicis immediately started integrating its own data with Influential’s platform to offer more targeted and effective influencer marketing solutions with its press release stating “By combining our Epsilon data, which allow us to see 2.3 billion people around the world, with connected TV, commerce, and now creators, we can enable our clients to truly know and understand their customers and prospects, and engage with them on a one-to-one basis, wherever they are, both online and offline”. The second was the acquisition of Mars United, the world’s biggest independent commerce marketing agency. Retail media is currently one of the hottest areas in marketing, with Next15 lauding its retail specialist SMG (which I’m proud to say was a Green Square deal), as a bit of a savior in what has otherwise been a very difficult year for that group (but that’s another story). Publicis’s acquisition of Mars in September completed the holy trinity of data, targeting and effective retail media deployment for Publicis, and further cemented the Power of One philosophy. From the press release: “The combined forces of Publicis Groupe and Mars will allow clients to influence the complete commerce journey for billions of global Shoppers, through an offering that begins with the industry’s deepest and richest database of consumer & shopper behavior and ends at the digital and physical shelves of the world’s leading online and offline retailers.” Thus, Publicis’ rise to become the world’s biggest agency group by revenue has not been entirely organic but facilitated by some very substantial acquisitions. That said, Publicis has not engaged in acquisitions simply for the sake of size, it only made a handful in 2024, and they were smart. Sadoun has absolutely stuck to his strategy of bringing a single point of focus for all Publicis’ clients’ needs and, given Influential and Mars only happened in the second half of this year, their further integration in 2025 should bring the group even more global blue-chip client opportunities. This is the first time a French agency group will be the world’s largest. France is currently suffering significant economic and political turmoil, and I wouldn’t be surprised if Emmanuel Macron hasn’t already called Sadoun to thank him for bringing this glimmer of Christmas light! Looking forward to 2025, Publicis’ holistic offering, scale and clear positioning put it alongside the highly acquisitive Stagwell and the soon-to-be-decoupled and separately listed Havas as the most interesting groups to watch next year. Read more

The numbers were looking good for the agency network halfway through 2024, but has it managed to keep momentum moving in the right direction? Our number-cruncher, Barry Dudley of Green Square, suggests not. At the half-year point, I sensed that momentum may be picking up at Dentsu. Unfortunately, the Q3 results don’t seem to show this, with just 0.3% organic growth in net revenue and the guidance for the full year being moved down to “circa 0%” from 1%. But this does mean two quarters of (marginal) growth, following declines in the previous five quarters, so it’s at least momentum in the right direction. Japan, Dentsu’s biggest market by far, saw “solid” organic growth (2.8%) driven by double-digit growth in internet media. EMEA was up a healthy 6.9%, but this was largely down to the comparative quarter in 2023 being hit by a “one-off negative impact.” Americas, its second biggest market, was down 3.1% and “the situation in APAC remains severe,” declining 11.6%, with ‘difficult market conditions” in Australia a key factor. Hiroshi Igarashi, president and global CEO at Dentsu, said: “We have seen notable global new wins in the quarter, higher pitch win rates in Japan and the steady accumulation of net wins in the media business in international markets, which is the result of our continued effort to deliver Integrated Growth Solutions. These are examples that prove the implementation of One Dentsu is affecting positive changes within our organization. “Over the last nine months, we have made internal investments around data and technology, people and culture and business operations to accelerate our competitiveness.” Undoubtedly, some of that technology investment would have been in AI, although AI was not referenced once in the whole of the press release and only three times in the 52 page Earnings Presentation. But I did find this comment: “Creative won a significant global pitch in Q3 where we were able to demonstrate synergies with Tag, especially on creativity and efficiency.” Synergies and creativity are not traditionally the best of bedfellows, but perhaps it’s that pesky AI at work… Dentsu’s next Mid-Term Management Plan is set to be announced in February 2025 and it says that “under One Dentsu [it] will achieve growth that outperforms the global market by 2027” and “the plan will cover specific business strategies to recover competitiveness.” Sounds like one hell of a plan. Looking forward to reading that. Read more