The recent merger of Omnicom and the Interpublic Group of Companies has been reported as a significant shakeup for the industry, but it’s actually a sign that legacy agencies are struggling to retain clients. This merger is a lifeline for these agencies, as they consolidate resources to try to avoid declining relevance for another year.
The merger won’t benefit clients
For clients of these agencies that hope that the merger will provide them access to more senior talent, we have some news. The execs that are part of this deal aren’t working with clients now, and certainly won’t be after the ink is dry. The decision-making in these agencies is centralized, so brands often end up working directly with more junior staff, rather than senior talent, even though they’re paying top dollar. With the merger, even more bureaucracy and layers of complexity are added, which are sure to slow down the speed of creative campaigns and execution.
When I was working at a larger agency earlier in my career, I was amazed that senior staff never seemed to be at client meetings. They were handling internal issues, in executive meetings, and attending conferences. Everything except working on the day-to-day of campaigns. Now that I run an independent agency, my top execs and I are involved with every client, from the first pitch to the media strategy to the execution.
Redundancies will follow
IPG has announced it will lay off 100 employees this month, even before the merger is finalized, where additional layoffs are expected due to overlapping roles and redundancies. Smaller markets like Canada will bear the brunt of these layoffs, which will leave the market with less local expertise. Again, this makes the merger a negative for brands, since they work with local agencies for that exact reason.
When we are approached by brands to execute a Canada specific strategy, they choose us because we understand the intricacies of different markets. For example, if you want to execute an effective strategy, you have to understand the cultural differences between Ontario, the Maritimes, and the Prairies. Being able to tailor your campaign to each audience gives you an edge, especially when larger agencies have the tendency to treat all of Canada the same.
Educating brands on the value of independent agencies
Despite these problems, most brands that weren’t working with independents before this merger, likely won’t afterwards. There is a misconception among these brands that size equals value. But most of the time, independent agencies are more creative and agile. They can also go to market much faster because they don’t have to navigate a sea of bureaucracy.
For agencies like ours, this merger is a great opportunity to educate brands about the tailored approach we can offer. Brands often feel like they’re giving something up when they don’t work with a legacy agency, but we’ve proved that this isn’t true.
Not only have we led successful media campaigns for brands like Mucho Burrito, Metronet, and Centennial College, we’ve also developed our own adtech. We built Reticle AI, our contextual targeting tool that uses emotional alignment to increase awareness, from the ground up. We saw signal loss coming years ago, and we built Reticle AI as a response to the problem. Independent agencies can adapt quickly to these kinds of problems. Legacy agencies don’t have the ability to adapt that quickly because new projects have to go through so many layers of bureaucracy.
Brands need to reevaluate their priorities
The Omnicom IPG merger may or may not give these agencies the opportunity to innovate. Brands need to reevaluate what their priorities are. If you want to be on the forefront of adtech innovations, and using the newest media buying strategies, you need to be working with an agency that is your partner and shares your passion and views, not your EBITDA contribution. The benefit of an independent is that it can offer speed, creativity, and personalization that the large agencies simply can’t offer.
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