Home Agencies Quick Take: Agency Holding Companies Need To Merge With Technology

Quick Take: Agency Holding Companies Need To Merge With Technology


unmergedWith the collapse of the proposed merger of agency holding companies Omnicom and Publicis, former agency exec and Vertere Group’s Tim Hanlon provided his take:

    “Much of of the logic I laid out last year when the deal was announced still holds. If anything, it only exacerbates the questions that brand marketers have about how to best tackle their increasingly complex task of messaging to and communicating with their consumers.

    The collapse of this deal may simply indicate that cold, hard quantitative economies and efficiencies of scale applied to a business function that is fundamentally (and historically) *qualitative* in principle, structure and process – can only extend so far before diluting, or worse, undermining itself.  Marketing services alone – no matter to what level of scale – will not be enough to solve modern marketing challenges that are increasingly digital and sophisticated.

    What agency holding companies need to do is not merge into bigger versions of their current selves, but instead combine with the increasingly important technology prowess of enterprise software, cloud computing and data architecture firms to transform their fundamental value propositions and to ensure their relevance to marketers in the coming years.”

Meanwhile, BMO Capital analyst Dan Salmon paused this morning between separate conference calls (see Omnicom; Publicis) with the two agency holding companies to provide his view to investors.  

Salmon continues to recommend the shares of both companies for what he says are different reasons, but that clearly the end of the merger is a negative for both.  

That said, Salmon doesn’t believe the oft-mentioned client or employee movements were never put into motion by the original proposal.  And, he adds that agency holding company Interpublic Group does not seem like a next option for either, but digital agency Sapient could be in the sights of Publicis acquisition strategy.

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