Publicis Groupe chief Maurice Lévy and Omnicom CEO John Wren continued their road show today, holding an analyst session in London to explain the combination of their companies that will ring up nearly $23 billion in revenue and house half of the industry’s big networks under one roof.
Lasting nearly 90 minutes, the meeting didn’t shed a lot of new light beyond what has been announced. It was interesting, however, because the news has been out there for a few days now and the executives were more emphatic in explaining the rationale for the deal.
Lévy, for instance, became animated when talking about the reaction to the merger, referring back to Publicis Groupe’s previous acquisitions of Saatchi & Saatchi in 2000 and Bcom3 in 2002. He said the response to both was critics calling Publicis a “broken company.” They were proven wrong, he said. About the Bcom3 acquisition, he noted that after the Publicis purchase the company had the “best organic growth,” Publicis solved all the company’s problems, dismantled Bcom3 company D’Arcy and reallocated assets and people to other of Publicis companies.
Lévy added that a lot of the external communications in the media about the current Publicis Omnicom deal is being generated by “extremely insecure” people who are threatened by the combination of the industry’s No. 2 and No. 3 players. While he didn’t identify those people, there was a veiled reference to WPP chief Martin Sorrell, with whom there is no love lost.
“There are two kinds of people in this industry,” he said, alluding to himself and Wren, while speaking on Sorrell's home turf. “And there’s another kind I won’t mention.”
Lévy went on to say that "this transaction is very big but the risks are very, very low and the distractions will be low,” and noted it was being done by two gray-haired, experienced individuals, prompting the two execs to compare notes on their hair.
Wren referred to Publicis’ experience in doing bigger acquisitions than Omnicom. But he went back to the creation of Omnicom, from three original agencies BBDO, DDB and Needham Harper & Steers in 1986, and said he’s learned what has worked well and what encumbered that merger and will not make those mistakes again. Wren explained why there was little consultation with operating heads at each company during the current merger discussions, saying he didn’t want the news to leak before he could tell his wife. Now the companies plan to set up committees and subcommittees to work through integration issues.
In talking about conflicts, Lévy pointed to competitors like WPP, which already works for rival companies like Unilever, Procter & Gamble and Kimberly Clark. Also, he and Wren said they have already received messages of support from clients as well as from Google and Facebook COO Sheryl Sandberg.
Wren addressed the competitive challenges from those new media giants, “They’re not a threat, they’re an opportunity."
He noted the partnership relationship both companies have with those entities. “It will deepen our relationship, not divide it," he said, adding that they don’t have the tools Omnicom and Publicis have in managing everything from the generation of creative ideas to execution.
In discussing the new competitive landscape, the two executives also mentioned the encroachment of consultants like Accenture, Deloitte, McKinsey and Bain as they continue to make inroads into marketing consulting.
While Lévy and Wren reemphasized that their deal is not being done for scale, Wren did point out that clients could expect some preferential treatment for media time in big events like the Super Bowl, Oscars or Grammys.
Omnicom CFO Randy Weisenburger addressed regulatory scrutiny, saying it was more focused on media than marketing services. He noted that media business will account for 12 percent of the combined companies’ revenue. “I don’t believe it will be an issue,” he said.
On a personal note, Lévy said 10 years ago he would not have thought of sharing Publicis with another company, but he said now he’s an “old man” at age 71 and needs to think of the company’s future.
“This deal will define the legacy of both of us in years to come,” he said.
Wren returned the favor and added, “I would not have contemplated this with anyone else.”