THE STREET.COM. May 9, 2014. Bigger just may not be better afterall.
Omnicom Group Inc.’s (OMC – Get Report) gain Friday following its mutual decision to scrap plans for a $35 billion merger with Paris-based rival Publicis Groupe reflects the view that the New York-based advertising giant is better off navigating the Brave New World of digital platforms alone rather than adding more layers of executives and fiefdoms. Omnicom and Publicis lost key accounts as the companies’ attention was diverted to the demands of a difficult merger.
At a time when more advertising buys are being placed by computers using sophisticated platforms, the distinction of becoming the world’s biggest advertising company didn’t auger for certain success.
“In this new and very, very different environment for advertising, scale is not a critical factor anymore,” Peter Kreisky, who has been advising media companies on strategy for more than 25 years, said in a phone interview. “Nimbleness and focus are winning share from the giants, and this is ultimately what stopped this merger from going forward.”