Possible Conflicts Associated With the Publicis-Omnicom Merger

1

Cars

A number of auto brands are parked within each of the two holding companies. Publicis' Saatchi & Saatchi works with Toyota, while Publicis' Leo Burnett works on a number of GM assignments, including Buick and Chevy Silverado.


Toyota, after intially declining to comment, issued a supportive statement on Tuesday, noting that "Saatchi and Saatchi LA has assured Toyota that the merged entity will be respectful of client proprietary information. As in the past, the agency has gone to great lengths to protect Toyota from exposure of confidential information and we fully expect that will be the case going forward."

 

GM, meanwhile, seemed unconcerned by the merger. "We will work with the new entity; we don't anticipate any issues," said a representative for the U.S. auto conglomerate.


In other words, compartmentalizing brands at distinct sibling agencies can help provide enough separation between competing clients to keep them comfortable. Omnicom's TBWA works with Nissan. Holding company sibling Merkley + Partners handles Mercedes, and sister shop DDB works on Volkswagen in markets outside in the United States (IPG's Deutsch leads VW creative in the U.S.).


TBWA's Nissan relationship is part of the Japanese automaker's global strategic partnership with French car company Renault. A statement provided by a Nissan spokesperson signaled enthusiasm for the merger. "Renault and Nissan are major global clients of both Publicis and Omnicom. We welcome the direction taken by Publicis and Omnicom to create a best-in-class communications, advertising, marketing and digital services company and will continue to work with them during the transition period and beyond."


A spokesperson for Volkswagen said it would be premature to speculate on, how or if the merger would impact the company's agency relationships.

2

Telecommunications

Publicis-owned agencies also work for a range of telecommunications companies. Media agency Zenith, owned by the French holding company, counts Verizon among its clients, while sister shop Optimedia buys ad space for T-Mobile. Publicis, the agency, works as lead creative for T-Mobile. Leo Burnett and Digitas, both Publicis shops, work together on ads for Sprint.


The lead creative role for AT&T's advertising, meanwhile, is handled by Omnicom's BBDO.


AT&T, T-Mobile and Verizon all declined comment. Sprint did not immediately respond to a request for comment.

3

Beverages

Coca-Cola and Pepsi have historically been holding company purists. In 2001, after Interpublic Group acquired Foote Cone Belding (via True North Communications), Pepsi moved a $350 million chunk of business from the agency to Omnicom shops to avoid conflicts with IPG's McCann Erickson, a major Coca-Cola agency. 


Now, Coca-Cola's roster includes Publicis' Leo Burnett on creative and Publicis' StarcomMediaVest Group on media buying and planning. Pepsi works with TBWA and other Omnicom shops like 180LA on creative, while Omnicom's OMD handles the lion's share of its global media chores.


Both soda companies declined to comment on the merger or potential conflicts that it might raise.

4

Food

McDonald's is known for being sensitive about conflicts, defending its "share of mouth" by taking a broad view of what constitutes two-timing for shops on its roster.


On the creative side, it already works around the globe with agencies owned by each holding company, including Publicis' Leo Burnett and Omnicom's DDB and TBWA.


Omnicom's OMD buys media for the brand. That means Publicis' relationship with quick-serve conglomerate Yum Brands —Optimedia handles buying and planning for Pizza Hut—could appear to be a potential sticking point.


But in the past, McDonald's hasn't constrained its agencies' holding company siblings from working for food-industry competition. DDB has created ads for the brand for decades; in recent years, Omnicom's BDDO has worked with the likes of Pizza Hut (currently in the midst of a creative review), Arby's and Starbucks.


Asked about potential conflicts arising from a Publicis-Omnicom merger, a McDonald's spokesperson said, "We work with both companies and it's business as usual at McDonald's." Yum Brands did not immediately respond to a request for comment. 

5

Beer

MillerCoors and Anheuser-Busch InBev could be another potential source of conflict, with Publicis' Saatchi & Saatchi working on Miller Lite, and Omnicom's BBDO now leading creative for Bud Light. Neither company immediately responded to requests for comments. AB InBev, however, also works with Publicis Groupe's StarcomMediaVest Group on U.S. planning for its beer brands.


Still, if clients like Coca-Cola, Pepsi, Coors and AB InBev were to find such conflicts copacetic, it would surprise some in the industry. According to one agency veteran, "Big clients still do care, big time, about these things."