Network ad sales executives aren’t sweating the sheer size of the Omnicom Publicis Group combination-at least not yet.
While the combination of media buying agencies owned by Omnicom and Publicis would create an entity that control an estimated 40% of total ad spending on national TV, veteran network sales executives note that wielding all that potential clout isn’t all that easy.
“There’s no doubt they have a lot of information on spending and categories which should benefit their clients,” said one senior TV ad sales executive. “It’s a question of what they do with those resources.”
At this point, it is not clear how the combined company would structure its television buying. One model would be the way WPP’s GroupM, currently the world biggest media buyer does it, with TV buying during the upfront for all its agencies coordinated in the U.S. under chief investment officer Rino Scanzoni.
The notion of facing a single negotiator who represents 40% of his business might inspire dread, the sales exec said. But the exec added, “This is a relationship business. It’s important not to lose sight of that fact. When you’re that big, as much as we need then, they’re going to need help from all the vendors to get their money down on behalf of their clients.”
Currently, the Publicis media agencies-Starcom, MediaVest and Zenith don’t centralize their buying either during the upfront or in the scatter market. The Omnicom agencies-OMD and PHD-coordinate during the upfront, but not during scatter.
One cable sales executive doubts buying will be centralized within the new Omnicom Publicis Group. “I don’t think this merger would pull national TV together under one negotiating umbrella, even during the upfront,” the sales exec said. “But if they do, in a moderate or strong market, it will make deal making harder, not easier with many of the leading networks companies. They’ll have too many needs to satisfy.”
The cable sales executive notes that “sometimes the more billing you control on the buy side, the more difficult it is to get deals done with leading brands because the agency side has too many endemic needs to satisfy in the upfront,” adding that “the bottom line is that if you are a commodity seller in media, these mergers are more challenging than if you have differentiated brands that dominate program genres.”
One area where the new company’s size should be a factor will be in moving forward with automating as many aspects of its business as is possible. “There’s a lot of business to conduct for a lot of clients at certain times of the year,” said one sales exec with some big agency experience.
It will take time before the Omnicom-Publicis deal is completed, and a bit longer before its operations are aligned. The clock will be ticking during that period.
“This business is changing significantly and quickly. The challenges faced by a behemoth such as Omnicom Publicis is just going to magnify all they have to do in a short period of time,” said the executive. “There will be a lot of eyes on them. Their clients will be speaking up. It’s their money they’re using for this.”