Another big ad industry acquisition? Truly, it’s a Christmas miracle.
On Monday, massive agency holding company Omnicom announced that its board of directors has unanimously approved a deal to acquire Interpublic Group (IPG), itself a holdco of several major agencies.
Previously, Omnicom and IPG represented the world’s third- and fourth-largest ad buyers, respectively. Merging will likely put Omnicom on top and make it the largest holdco.
The merger could also give the combined company an edge as it competes with Publicis. That holdco’s acquisition-focused strategy has been rewarded handsomely by its investors and in winning new pitches in recent years.
The acquisition will take place via a stock-for-stock transaction, after which the company will continue to retain the Omnicom name and New York Stock Exchange ticker (OMC).
According to Reuters, the deal comes out to a whopping $13.25 billion – roughly half of both companies’ combined revenue of 2023, around $25.6 billion – and is expected to close in the second half of 2025.
Current Omnicom Chairman and CEO John Wren will remain in his position, while IPG CEO Philippe Krakowsky will join Daryl Simm as co-president and COO of Omnicom.
Omnicom’s “AI-driven future”
Last year also saw Omnicom announce its then-biggest-ever acquisition of ecommerce platform Flywheel Digital for $853 million (although the deal didn’t officially close until January 2024).
As CEO John Wren shared in Omnicom’s third-quarter earnings call in October, Flywheel’s data has already been successfully integrated into Omni, Omnicom’s AI-augmented marketing analytics platform.
Further integrating Flywheel and Omni with Acxiom (which IPG acquired in 2018) and Interact (IPG’s own marketing platform, which launched in October) – will, according to the joint investment presentation that took place on Monday morning, “effectively position Omnicom for an AI-driven future.”
“Rather than listening to 75 different agencies’ slightly variant approaches towards AI, what we’re able to do is to put them in a room and have them come up with a consensus,” Wren said of Omnicom’s internal integration efforts in Q3.
It’s the “big five” now
The acquisition further consolidates the largest ad agencies, during a time when more ad spend has shifted to in-house marketers. According to Advertiser Perceptions, the big six holding companies controlled 29.6% of total US ad spending in the first quarter of 2024 – significantly down from the 44% they controlled in 2019.
“It’s not surprising that we would see some consolidation like this,” Advertiser Perceptions analyst Nicole Perrin told AdExchanger.
In any case, neither company appears to be worried about any regulatory pushback – nor are they worried about negotiations falling through, which is what happened when Omnicom and Publicis attempted a merger more than a decade ago, in 2013.
In this case, Omnicom’s Wren said on Monday’s investor call, Omnicom and IPG are a better cultural fit – and where the government is concerned, “we’re prepared to do whatever we have to do to get regulatory approval.”
