Omnicom, Y&R And Others Look To Acquire Management Consultants
NEW YORK–As management consultants continue to encroach on agency turf, several advertising companies are looking to fight back by acquiring or investing in the
Omnicom Group, the world’s largest advertising company, and the newly public Young & Rubicam Inc. both confirmed they are interested in making acquisitions in this arena.
“The whole area of consulting is something we are terribly interested in,” John Wren, president and chief executive of Omnicom, said at the PaineWebber Media Outlook Conference last week.
Asked to identify potential growth areas, Wren said Omnicom would “move” to acquire a consultancy “if it can be executed the right way” and if it can find the “right caliber” of companies. He declined further comment.
Peter Georgescu, chairman and chief executive of Y&R, confirmed the company is talking to several consultancies. “Access (to top clients) is not a problem for us,” said Georgescu. “The issue for us is making sure that we are constantly at the cutting edge.”
In the past year, Y&R bought Connecticut-based Capital Consulting & Research and Mead Point Group.
WPP Group chief executive Martin Sorrell has been the most outspoken about the threat of consultants. This year, WPP bought three small U.S.
consulting firms and established a unit dedicated to the business. WPP is considering future deals, as is the Interpublic Group of Cos., sources said.
Among those firms identified as potential targets, said sources, are: Andersen Consulting and A.T. Kearney, both in Chicago; Bain & Co. and Boston Consulting Group, both in Boston; Booz, Allen & Hamilton, McLean, Va.; and McKinsey & Co., New York.
The moves reflect attempts by agencies to regain territory lost to consultants, which have increasingly usurped their traditional role as strategic partners to clients. Many consultancies also realize better profit margins and higher growth rates.
“We go into the boardrooms; they go into the conference rooms,” said Gary Stiebel, a principal at The New England Consulting Group in Westport, Conn., who said he has been approached by at least four undisclosed buyers.
Ammirati Puris Lintas recently hired a former McKinsey executive for a senior post. “Obviously, we thought about [buying],” said chairman and CEO Martin Puris. “But there is a difference between bolting it on and integrating it into the agency. We decided to integrate it.” –with Hank Kim,
Judy Warner and Scott Hume
Get Adweek's Brand Marketing Daily Newsletter in your Inbox
Today's highs and lows of creativity