Omnicom: A Bigger Horse

I'm hearing that the Omnicom-IPG merger closes imminently, creating the world's largest advertising holding company with nearly $25 billion in combined revenue.

When Henry Ford said "If I had asked people what they wanted, they'd have said faster horses," he understood something that John Wren and Philippe Krakowsky apparently don't: the problem isn't the size of the horse. The problem is that you're still using a horse when the world has moved to automobiles.

This merger doesn't make the horse faster or point it toward new markets. It just makes it bigger, more expensive to feed, and slower to turn. And in an industry being simultaneously disrupted by platform disintermediation, AI automation, and consulting firm integration, bigger at the same shrinking services is just a larger target.

The fundamental failure: this merger doesn't expand Omnicom's addressable market, it concentrates risk in exactly the services being automated, in-housed, and disintermediated.

Here is what the inevitable HBS case study will say when MBA students in 2028 gather to go through the 'blindingly obvious corporate mistakes to avoid' topic area.

This merger fails on three fundamental dimensions that will determine survival in the marketing services industry:

Now let's examine each failure in detail:

The press releases celebrate scale: "$25 billion in combined revenue." But this merger commits a fundamental strategic error: it makes Omnicom bigger at what they already do, while what they already do is a shrinking part of the marketing value chain.

This merger doesn't expand TAM, it concentrates risk in exactly the market segment being automated, in-housed, and disintermediated.

Compare this merger to Publicis's strategic acquisitions:

Publicis acquired Sapient (2014, $3.7 billion): Expanded TAM into business transformation, digital transformation, and enterprise consulting. Moved upstream from "create the campaign" to "define the business strategy that determines what campaigns you need." This positions Publicis at the C-suite level, before marketing budgets are even allocated.

Publicis acquired Epsilon (2019, $4.4 billion): Expanded TAM into first-party data infrastructure, marketing technology, and outcome-based services. Created a new business model where Publicis doesn't just execute campaigns, they provide the data infrastructure that makes campaigns work and can charge on outcomes, not hours.

The result? Publicis grew organic revenue 5.8% in 2024 while the balance of the industry has contracted (and they have zero debt). That growth didn't come from being better at traditional agency services. It came from selling services that didn't exist in their portfolio before the acquisitions.

This merger makes Omnicom bigger in a market that's shrinking.

It's the equivalent of two travel agencies merging in 2010, right as Expedia and Kayak were eliminating the need for travel agents. You can achieve operational efficiencies. You can promise synergies. But you're still selling services in a market being automated away.

The efficiency metrics reveal why TAM concentration without capability expansion is fatal:

Google generates approximately $1.9 million in revenue per employee. Meta: $1.7 million. The combined Omnicom-IPG? Roughly $240,000 per employee.

That's not a gap. That's evidence of fundamentally different business models. Platforms generate 8-12x the revenue per employee because software scales and people don't.

This merger does nothing to close that gap. It doesn't add proprietary technology that scales. It doesn't create AI-powered automation that reduces human dependency. It combines two companies with similar revenue-per-employee profiles in the same shrinking market and promises to cut 20,000 jobs to hit the $750 million synergy target.

Cut 20,000 people from ~104,000 combined workforce (roughly 19%) and you improve from $240,000 to $298,000 per employee. Still 6x worse than platforms (leaving aside the inevitable revenue contraction). And you've destroyed institutional knowledge, triggered talent defection, and created integration chaos, all while remaining in the same shrinking TAM.

Media Billings are a Vanity Metric

The industry will celebrate "combined media billings" as if $25 billion in media throughput creates competitive advantage. It doesn't. Media is increasingly becoming a commodity. The continued shift to digital and platforms means scale doesn't get you better prices, platforms set the prices, and they're identical whether you're buying $1 million or $1 billion.

What creates value isn't media scale, it's what you do around media. Publicis built Epsilon's first-party data infrastructure that enables outcome-based pricing and creates switching costs. Accenture positioned as the business transformation consultant who determines media strategy, not just executes it. Specialists amplify media with vertical expertise that commands premium pricing.

Omnicom-IPG will have media scale. What they won't have is the capabilities that make media scale valuable.

Meta's push toward fully automated AI-powered ad creation poses a real risk of disintermediation for agencies, particularly with small and mid-size brands that may be drawn to the promise of lower costs and simplicity. Google's Performance Max (PMax) allows marketers to input a campaign goal, a target CPA, their brand safety guidelines, and a link to a landing page, from there, Merlin's generative AI crafts the ad copy, generates bespoke image and short-form video assets, and dynamically allocates budget across search, YouTube, display, and discovery in real-time.

IPG's Two Assets: Necessary But Not Sufficient

IPG brings two assets to this merger: Acxiom's identity data and media scale. Neither creates meaningful defense against platform disintermediation.

Acxiom: Good But Not Good Enough

Acxiom is a credible identity resolution platform with legitimate first-party data assets. But here's the structural problem that will doom its effectiveness: Acxiom operates as a separate agency within IPG, selling its services as a product line.

Compare that to Publicis's Epsilon. When Publicis acquired Epsilon for $4.4 billion, they didn't position it as another agency selling services. They integrated it across the entire holding company as CoreID, the foundational identity layer that powers creative personalisation, media optimisation, and measurement attribution.

Acxiom at IPG? It's another product to sell. Another agency brand. Another P&L. Another source of friction.

This matters enormously. Platform disintermediation happens when clients can get creative, media, and optimisation directly from Google or Meta without agency involvement. The defense against disintermediation is integration, combining data, creative, and media into a unified solution that platforms can't easily replicate.

Publicis can offer outcome-based pricing powered by Epsilon's data because the integration is real. A client buying Publicis gets access to the data infrastructure automatically. A client buying Omnicom gets offered Acxiom as an add-on product they can purchase separately.

That's not integration. That's cross-selling. And cross-selling doesn't defend against platforms that own the entire stack by default.

Media Scale: The Commodity Trap

Combined media scale sounds impressive: "world's largest media buyer." But media is increasingly becoming a commodity. Platforms set the prices. Whether you're buying $1 million or $1 billion of Meta inventory, you pay the same CPM. Scale doesn't get you better prices, it just means you spend more at the same price.

What creates value isn't media scale, it's what you control around media. Publicis controls first-party data that enables better targeting and outcome-based pricing. Accenture controls the business transformation relationship that determines media strategy. Specialists control vertical expertise that commands premium pricing.

Omnicom-IPG will have media scale. What they won't have is more control over any dimension that actually matters.

The merger does nothing to defend against this existential threat. Combined media scale doesn't matter when platforms own the relationship, the data, the creative tools, and increasingly, the strategic planning. The merger creates a larger intermediary at exactly the moment platforms are systematically eliminating intermediaries.

Both Omnicom and IPG built empires through acquisition, creating dozens of independent agency brands competing for the same clients. This tribal structure, where BBDO competes with DDB, where McCann competes with FCB, adds friction to every client engagement.

That friction costs money. It costs speed. It costs trust. And merging two fractious holding companies doesn't eliminate friction, it multiplies it.

Industry reports indicate that some individual agency brands could be deprecated as part of the merger, with speculation that DDB Worldwide may be phased out, with core creative delivery consolidated under fewer global networks, notably BBDO Worldwide, McCann Worldgroup and TBWA Worldwide. Killing beloved agency brands to achieve "operational efficiency" is the exact wrong lesson from Publicis's transformation.

Publicis didn't kill agency brands to create "Power of One." Arthur Sadoun eliminated agency P&Ls and rebuilt the entire holding company around geography and client P&Ls. The brands still exist, but they no longer compete internally, they collaborate toward unified client outcomes. That took years of patient cultural transformation, leadership consistency, and willingness to break the colonial model.

Omnicom-IPG promises to execute this transformation while simultaneously cutting 20,000+ positions, managing complex client conflicts, integrating disparate technology platforms, and placating shareholders demanding the promised synergies. The timeline? Wren aims to have it done before handing over to his successor in 2028.

This isn't transformation. It's cost extraction disguised as strategic positioning. And CMOs will see through it immediately.

So we have worse economics, inadequate strategic defense, and cultural friction multiplying instead of resolving. But the merger's greatest failure is structural.

The merger exposed something more damning than its strategic flaws: the industry's leadership is optimising for their own exits, not the industry's future.

Three data points make this undeniable:

First: The Executive Golden Parachutes

John Wren extended his contract through 2028 at a symbolic $1 annual salary. That sounds noble until you realise he's already made his money. What he's buying with 20,000 jobs is a place in advertising history books: "The man who created the industry's largest company." That it might be an unstable, value-destroying combination won't matter to Wren. He'll be gone before the bill comes due.

Philippe Krakowsky receives $48.6 million under change-in-control provisions and becomes Co-President and Co-COO. That's not a retention package, it's a golden parachute disguised as a promotion. The 3,200 IPG employees cut this year? They got severance if they're lucky. The 20,000+ more facing elimination? They get "transition support."

Second: The Bankers Already Got Paid

Investment banks earned hundreds of millions in advisory fees when the deal was announced. They get paid again at closing. Goldman Sachs, JPMorgan, Centerview Partners, they all made their money.

Do they care if integration fails? Do they care if the $750 million in promised synergies never materialise? Do they care if clients defect and talent leaves?

They got their fees. They're already advising on the next deal. The outcome is irrelevant to their economics.

Third: The Consultants Are Positioning for Cleanup

Management consultants are already positioning for the integration work. They'll make more money fixing the integration disaster than the bankers made doing the deal. McKinsey, BCG, Bain, they're all preparing proposals for "post-merger integration support."

Why would they warn against a bad merger when the integration cleanup is where the real money gets made?

I've spent 15 years in holding company leadership, including as CMO of Publicis Groupe during major integrations. I've seen what successful transformation requires. It's not primarily about scale or synergies. It's about expanding your addressable market into growing parts of the value chain.

The Omnicom-IPG merger optimises for scale in a shrinking market. It concentrates risk in exactly the services being automated by platforms, in-housed by clients, and replaced by consultancies. It creates debt that constrains investment capital while demanding cost synergies that eliminate the people who might build differentiated capabilities.

Most damningly, this merger solves for executive legacy and financial engineering while ignoring the fundamental strategic question: What new parts of the marketing value chain can you access?

The answer is none. The merger makes Omnicom bigger at creative, media, and specialty services, exactly the capabilities platforms are automating and clients are in-housing. The revenue per employee gap ($1.9M for platforms vs. $298K for Omnicom-IPG post-cuts) is evidence they're selling people-based services in a software-dominated market that's actively shrinking.

In three years, we'll look back and wonder why no one stopped it. The answer is already clear: the people who could stop it had every economic incentive to let it proceed. And the people who will pay the price, the 20,000+ employees facing elimination, the CMOs navigating integration chaos, the shareholders watching value destruction, had no vote.

This isn't a merger. This is a monument to an industry that chose scale in a shrinking market over expansion into growing markets. Two travel agencies merging as Expedia eliminates travel agents. A bigger horse as the world upgrades to tanks.

And the platforms are watching, knowing that every day this integration consumes internal focus is another day they can build tools to replace what this merger offers: commoditised services in an automating market.

Brandflow is written by Justin Billingsley, who has spent his career on all three sides of the industry's table: senior client, global agency leader, technology founder. First published 26 November 2025 in the Brandflow newsletter on LinkedIn.