What The Publicis Omnicom Merger Means For Ad Tech

paulchu“Data Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media. 

Today’s column is written by Paul Chu, vice president of advertiser solutions and RTB at PubMatic.  

The recent news of the merger between Omnicom and Publicis shook the advertising world, and, like everyone else in the industry, I have spent much time thinking about what this momentous union means.

Combined, the company will control more than 40% of US ad spending, according to some sources, so the ripples will affect many of us. While the dust settles, a few things remain clear.

First, size dictates standards. The new entity, Publicis Omnicom Group, along with WPP, will be in the driver’s seat when it comes to setting standards that will allow them to leverage big data and make media buying more efficient. Moving forward, expect to see companies such as Salesforce and Accenture take a hit as they struggle to defend themselves against the new company’s tech stacks and data-driven marketing. Some might survive the onslaught, but we’re likely to see a furious game of musical chairs take place in the coming months as the market ascertains which ad-tech solutions will thrive in this new world and which will not.

The merger will also have broad implications for media companies: Any future deal that follows in its wake now will result in a handful of companies with massive leverage. Most likely, the new Publicis Omnicom Group will adhere to bulk rather than custom media buying, which means any company that was counting on media inflation — virtually every media company in the market — now has to play by someone else’s rules.

For publishers to remain competitive in this new media landscape, they simply must get better. They will get left behind if publishers and content providers aren’t as efficient as these new agency holding companies need them to be. They will not survive if they cannot create first-party beacons quickly enough to capture programmatic value. They will fail if they cannot quickly exchange data, audience or content insights with the big holding companies, or increase their scale and audience, or execute across all devices in all media.

In addition to technology, media companies now need services because the future is approaching more quickly and most simply aren’t prepared, strategically or operationally. As the industry settles, keep an eye out for companies that go under and take note of how they perform from a service perspective. It might surprise you how similar they are in lacking the requisite technology to perform effectively.

This means content providers don’t just need better technology. They now need strategic partners who can help them weather the storm and profitably traverse this new landscape by simplifying and unifying their tech stack and integrating with the new holding company tech stacks. This means that publishers will need to sharpen their understanding of, and readiness to execute on, programmatic direct deals. The game has changed and there is no going back.

Finally, this merger will highlight the fact that people really do matter now more than ever. At the risk of sounding cliché, this new, rapidly shifting landscape requires global services and executive leadership that can serve as true strategic partners to content publishers and ensure that they stay ahead. Call it the Human API: Companies that put forth a knowledgeable team, invest in innovation and help their customers not only survive but thrive will emerge as winners, while others will become redundant.

These are not minor changes. Human behavior being what it is means we’re likely to see both horrible mistakes and brilliantly creative approaches play out before too long. I believe the core principles, however, remain the same: The future belongs to companies that see their mission as a powerful union between people and technology, while enabling partners to efficiently package, manage and monetize digital assets and connect brands with their audience. These companies give publishers access to data and metrics so they can make the most out of potential opportunities.

This is why we feel rather excited about what lies ahead. Big mergers are thrilling, but partnerships between individual companies are what always have — and always will — shape the future of our industry.

Follow PubMatic (@PubMatic) and AdExchanger (@adexchanger) on Twitter.

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