• Ad industry insiders say the Omnicom takeover of Interpublic Group could kick off more M&A.
• Insiders laid out who could be involved, from WPP to smaller holding companies.
• Private equity and global solutions providers like Accenture also could be consolidators.

The planned $13.25 billion takeover by ad holding company Omnicom of Interpublic Group by merger has industry insiders speculating: Who's next?

Other agency giants face similar conditions that led two of the six big ad-holding companies to seek a merger. There's the concentration of ad dollars with tech giants Google, Meta, and Amazon; the need for media-buying scale to maintain an edge with global advertisers; and the growing use of AI that threatens to wipe out certain agency tasks. The US ad industry has barely grown over the past few years. By combining, Omnicom and IPG are looking to ensure their continued survival.

Some industry insiders think the Omnicom-IPG tie-up is just the start of a massive reordering of the $70 billion ad agency industry and that it's only a matter of time before other holding companies are forced to acquire or be acquired as they look to bulk up.

"From an M&A perspective, it's only going to add fuel to the fire," said William Ritchie, founding and managing director of the media and technology advisory firm WY Partners. "As others vie for competitive advantage over the newly crowned world's largest holding company, I'd expect there is going to be more competition for the best assets and more focus on building a streamlined data and tech-first offering which can compete — notably with companies like WPP, which remains behind the curve on competitive advantage here."

Ritchie said he sees continuing interest in assets that specialize in using data, tech, and AI to inform advertising, as well as PR and communications companies. He noted KKR's recent move to increase its stake in FGS Global, a comms and public affairs firm.

The IPG-Omnicom combo will spark more consolidation for other reasons, said Andreas Roell, CEO of Evros Group, which advises on media, marketing, entertainment, and tech deals. Once the new group decides what it wants to be known for, it may discard the units that don't fit that new identity and also divest some agencies that have competing clients or culture clashes.

Other networks will have to look in the mirror and decide if they're strong enough to acquire weaker networks or acknowledge they're falling behind due to tech disruption, Roell added.

"My prediction is that 2025 will serve as a reckoning year for networks," he said.

Other holding companies could partner up

Starting at the top of the food chain, some industry insiders think the upheaval could force two other longtime rivals to come together: French ad-holding company Publicis Groupe, which has been outperforming its competitors lately, and London-based WPP.

"Mark Read has not done the job that he probably expected he would be able to do; [Arthur] Sadoun is doing a great job," Tom Triscari, CEO and founder of Lemonade Projects, a programmatic ad agency, said of WPP's and Publicis' leaders, respectively.

Such a combo might be tricky to align culturally, though. A proposed merger between Publicis Groupe and Omnicom famously broke down in 2014 after they failed to agree on multiple fronts, including which agency would be seen as the acquirer and who would be appointed chief financial officer. It would also need to pass regulatory muster. That could be harder to do if the IPG and Omnicom deal succeeds, reducing the number of big agency groups in the sector. And there would be so much complexity that Publicis might not see the upside.

Another top holding company that could be active is Havas. Its parent, France's Vivendi, just approved its split into four companies. This is set to lead to Havas being publicly traded as its own company. Havas has indicated that it has M&A in its sights.

A number of other smaller, independent ad-holding companies could help bigger players scale up, like Mark Penn's Stagwell, the Bill Koenigsberg-led Horizon Media, or the Martin Sorrell-founded S4 Capital.

David Morgan, executive chairman of TV ad-buying company Simulmedia, said Horizon Media could be in play since Temasek, the investment firm that bought a minority share in 2021, needs an exit at some point.

Digital performance shops like PMG and Kepler also could be of interest.

Private equity has been circling

The big holding companies could also be a target for private-equity giants. Apollo, KKR, and Blackstone have shown interest in media and entertainment. Industry insiders have speculated for months that WPP, which once ranked as No. 1 among agency businesses, could be taken private — or at least some parts of it could be.

"They all see the same thing — these assets are bloated and mismanaged," said an industry player who's had conversations with PE firms. They asked for anonymity to preserve business relationships. Their identity is known to BI.

Another group of potential acquirers is companies like IBM and Capgemini, which provide a range of business solutions. Tata Consultancy Services and Accenture Song have eyed ad agencies as a way to offer end-to-end services to clients. Tata was in talks to buy R/GA this year and Accenture acquired creative agency Droga5 in 2019.

When it comes to deals that are just about getting bigger, though, there's plenty of skepticism that bulking up will solve the problems agencies face.

"Agencies today are not losing to the tech giants because of a shift in power," said Jay Friedman, CEO of the Goodway Group, a brand consulting firm. "They're losing because the capabilities they have aren't fit for how brands need to buy advertising today. They need a better cost model overall, which is global and AI-driven."

• The Omnicom-IPG mega-merger will create waves across the ad industry.
• Mergers are highly disruptive in the short term, and opportunistic rivals could pounce.
• Ad industry workers should expect concerned clients and bruised egos as the two companies combine.

A coming mega-merger is set to make waves across the advertising world, especially among the millions of people employed by ad agencies globally.

On Monday, Omnicom announced a $13 billion agreement to acquire fellow US advertising agency business Interpublic Group. The deal would create the world's largest advertising agency holding company.

Industry insiders shared their thoughts with Business Insider on how the merger could impact individual workers at Omnicom and IPG, as well as in the industry at large. They said ad industry workers should expect disruption like job cuts and opportunistic rivals swooping in for concerned clients as the new Omnicom takes shape.

Prepare for job cuts

As with many horizontal mergers, job cuts seem inevitable.

Omnicom said Monday the transaction would "generate $750 million in annual cost synergies" as it consolidates its operations with IPG.

Steve Boehler, the founder of marketing and management consulting company Mercer Island Group, predicted in a LinkedIn post that "thousands" of people would lose their jobs.

Job security in the ad agency world has been increasingly hard to come by. Agencies often lay off entire teams when they lose a major client. US advertising, PR, and related services employment fell by 300 jobs to 522,900 in November, despite overall US employment rebounding, according to the Bureau of Labor Statistics.

AI could also negatively impact the advertising job market. The research firm Forrester said last year that the rise of automation could lead to the loss of 32,000 jobs within ad agencies by 2030, about 7.5% of the total worldwide agency workforce.

Expect short-term merger turbulence and questions from clients

Merging two companies with 100,000 people, dozens of different agency brands, and hundreds of offices across the globe will not be a simple task.

"It's a massive integration risk," said Martin Sorrell, the executive chair of rival agency S4 Capital, who led WPP for more than 30 years. Sorrell has been an active acquirer of businesses throughout his career.

The companies could also dispose of assets. IPG announced recently that it would sell its digital ad agency Huge to a private equity firm and had said earlier this year it was also looking to offload R/GA, the agency famed for its work for Nike. IPG said the companies would continue to act independently until the deal closes and that during that time they would continue advancing strategic plans that had previously been announced.

Some clients will also have questions, particularly if the combination means their agency is working for one of their direct rivals.

On a call with analysts on Monday, Omnicom CEO John Wren downplayed the threat of client conflicts.

"Are there clients that we have to sit in the coming weeks and months and assure them that we still love them quite as much as we did prior to this morning? Yes." Wren said. "But clients are what drive us every morning when we wake up."

Egos will be bruised

A proposed merger between Omnicom and Publicis Groupe memorably failed in 2014 after the two companies couldn't agree on which executives should hold key positions, such as the CEO role.

While the Omnicom-IPG deal appears more straightforward, there will be some humbling as the company looks to reduce duplicative roles and some execs are looked over for the top roles.

On Monday's call, Wren said he wasn't worried about senior people looking to change their careers as a result of the merger.

If you're in one of these roles, you are in demand

Omnicom and IPG executives on Monday talked up the potential for combining their technology platforms, the use of data and analytics, and disciplines like media trading and customer-relationship management.

"Superstar creators and creatives will also be in demand, as well as good strategists, in all disciplines," said Simon Francis, CEO of marketing consultancy Flock Associates. "But, lots of other roles will become diminished."

Jay Wilson, VP and analyst for the research company Gartner, said job candidates looking to strengthen their résumés should consider that high-performing brands are looking for strong performers in areas like business strategy, strategic thinking, and data analysis.

"Advertising and marketing workers certainly need to upskill on Gen-AI skills as well," Wilson said.

Smaller independent agencies could benefit

As Omnicom and IPG work through the merger, there will be opportunities for rival agencies to pounce.

"Competitors will decide to target you and go through all your clients and your best staff, it's inevitable," a former Publicis Groupe exec said Monday. They spoke on the condition of anonymity to protect career prospects. Their identity is known to BI.

Nimble independent agencies that aren't encumbered with legacy businesses could offer good career opportunities for people who don't want to deal with the complexity of a giant network.

"Certain people will make life or business-style decisions to say, 'God, I don't want to be in this oil tanker and I'd rather jump into a speed boat,'" said a former WPP veteran, who asked not to be named in order to protect their business relationships. Their identity is known to BI.

With fewer big holding companies to choose between, consolidation could drive up prices for clients, which could also present more opportunities for smaller rivals to undercut the incumbents on fees, the WPP veteran added.

• A $13.25 billion merger of Omnicom and Interpublic Group would create the largest ad-agency company.
• Industry insiders say the deal reflects an ad sector under threat from Big Tech and AI.
• A bigger company could have more leverage to make deals, but job cuts seem inevitable.

For ad-industry insiders, the US ad giant Omnicom's proposed takeover of its rival Interpublic Group represents the consolidation of a challenged sector and shows that the future of advertising will be rooted in data and AI.

Being big matters as the industry wrestles with disruption from the might of Big Tech players and the advent of artificial intelligence. While AI could make offerings more efficient, it also threatens to displace many ad-agency services and affect the prices they can charge for them.

First reported on Sunday by The Wall Street Journal and confirmed by the companies on Monday, the agreement would create a company with combined revenue of more than $25 billion, based on last year's figures. The $13.25 billion all-stock deal would merge Omnicom's creative and media-buying agencies, such as BBDO and Omnicom Media Group, with IPG's McCann Worldgroup and Mediabrands.

The combination would create an entity bigger than Publicis Groupe, which has the largest market capitalization in the sector. Analysts expect Publicis will end the year with the most revenue, too.

The French advertising company, the sector's star performer, has outpaced rivals thanks to its simple messaging about an integrated set of services and as multibillion-dollar acquisitions in areas like data, IT systems, and commerce began to bear fruit. It also came out of the gate on AI, launching its internal Marcel platform in 2018, before generative-AI hype.

The combined company seeks to get an edge in AI, data, and media buying

Omnicom-IPG will be hoping to knock Publicis off the top spot — and not just on paper. By creating a larger company, Omnicom-IPG would have a bigger base to deploy data or technology like AI, which could give it leverage to secure beneficial and exclusive deals with partners such as cloud providers.

"Technology and data and thereby data-driven marketing has been arguably the largest driver of differentiation and growth for agencies for some time now, and one of the benefits of additional scale is being able to leverage major technology investments over a larger base of operations," said Simon Nicholls, a partner at the advisory firm GP Bullhound, which works on mergers and acquisitions within the ad industry.

Some industry insiders say both Omnicom's and IPG's investments have lagged behind those of their competitors.

One rival minced no words.

"It's a merger of two drunkards leaning against the lamppost as far as AI is concerned," said Martin Sorrell, a former CEO of WPP who now leads the digital-marketing company S4 Capital.

The so-called IPG engine is powered by a nonexclusive partnership with Adobe GenStudio. Omnicom — whose Omni AI platform doesn't lock clients into the Omnicom ecosystem — hasn't offered as many specifics as its key rivals have about how much it's investing in proprietary AI.

Still, the merger could benefit the pair in the future.

"This ushers in not just a new era of scale — it ushers in the opportunity to invest in where the marketplace is going, which is creative and tech powered by AI," said Laura Desmond, an ad-industry veteran who now leads the martech company Smartly.

Scale is also crucial in media planning and buying, the profit centers of many agency businesses. Generally, the more client ad budgets you control, the more leverage you have as an agency when it comes to negotiating deals with media owners.

Being bigger is also particularly important in the lucrative but often controversial practice of principal-based media buying, where agencies buy ad inventory in advance and sell it back in packages to clients. It's controversial because the agency doesn't disclose the price at which it originally bought the media to the advertiser. Agencies have defended the practice, saying that it still drives performance for brands — and that brands themselves are often pushing agencies for lower ad prices. A larger advertising agency would have a bigger market of clients to resell its ad inventory back to.

An opportunistic deal in a turbulent market

Some of the rationale behind the deal is opportunistic.

IPG has been trailing behind its rivals recently, having lost key client accounts like Amazon's media-buying business, General Motors, Pfizer, Microsoft, and Coca-Cola. Meanwhile, Omnicom's stock is at an all-time high.

"Wren is a wily old fox; he's no fool," Sorrell said, referring to Omnicom CEO John Wren's move to agree to the deal while Omnicom was on the upswing and IPG was floundering.

Omnicom said Wren would remain the company's CEO after the deal closes. The acquisition, subject to regulatory and shareholder approvals, is expected to close in the second half of 2025.

What the deal means for ad-agency jobs

The consolidation of the two companies is likely to lead to large synergies — including job cuts. Omnicom said on Monday that the transaction was expected to generate $750 million in annual cost savings. The research firm Forrester said last year that the rise of automation could lead to the loss of more than 30,000 jobs within ad agencies by 2030.

Simon Francis, an ad-agency veteran who now leads Flock Associates, a marketing consultancy and recruitment firm, predicted that in the ad-agency sector, "there will be even fewer big roles and lots and lots of junior roles."

"It will be harder to climb the career ladder," Francis added. "Superstar creators and creatives will also be in demand, as well as good strategists, in all disciplines. But lots of other roles will become diminished."

That could create opportunities for smaller agencies, especially as the merged company works its way through the disruption caused by integration, egos being knocked out of joint as roles combine, and client conflicts in which the new entity suddenly works with two or more fierce rivals in the same sector.

A proposed deal to merge Omnicom with Publicis Groupe a decade ago memorably fell apart after the pair couldn't agree on which executives would hold key positions, including chief financial officer.

"The lessons learned a decade ago are not going to be repeated," Wren said on a call with analysts on Monday morning.

Nimble independent agencies that aren't encumbered by legacy businesses could offer good career opportunities for people who don't want to deal with the complexity of a giant network. But industry insiders said it's probably not a good idea to bet on companies in the middle of the pack, especially for those working in in-demand specialties like data, tech integration, and commerce media.

"For the average worker, it's going to be all about scale," said Greg Paull, a principal of the R3 marketing consultancy. "Unless you are in a creative boutique like Wieden+Kennedy or Mother, the world's largest clients are going to seek out the world's largest holding companies."

• Omnicom is taking over the Interpublic Group to create the world's largest ad-agency business.
• The deal is expected to generate annual cost savings of $750 million.
• John Wren will remain CEO of Omnicom, while his counterpart Philippe Krakowsky will be co-COO.

Omnicom is taking over Interpublic Group in a deal expected to create the world's biggest advertising and marketing agency business, the US advertising company said on Monday.

The two had been in third and fourth place in the highly competitive ad-agency sector, but a combined entity would eclipse both London-based WPP and France's Publicis in terms of expected revenue and market capitalization.

Advertising industry insiders said the deal underscores the disruption faced by agency holding companies. Agencies face the dilemma of helping clients leverage tech while at the same time risking being displaced by AI and automation.

Industry insiders said the new company's added scale could bring benefits like the leverage to strike better deals with tech and media companies. It could also allow them to combine some offerings and eliminate duplicative roles. However, some industry insiders warned that merging the two companies could be highly disruptive in the short term, which could prompt their rivals to try to poach clients and key staffers.

Investors will receive 0.344 Omnicom shares for each IPG share they own. Omnicom shareholders will own 60.6% of the combined group. The deal is expected to generate annual cost savings of $750 million.

Omnicom was valued at about $20 billion at Friday's close. Its shares fell around 4% in early morning trading after the deal was officially confirmed. IPG was worth $10.9 billion at Friday's close, and its stock jumped by around 12% on Monday morning. The shares of competitor ad companies WPP and Publicis Groupe were also up following the Omnicom-IPG news.

The new Omnicom will have more than 100,000 staffers and offer services across media, precision marketing, customer relationship management, data, digital commerce, advertising, healthcare, public relations, and branding.

"Now is the perfect time to bring together our technologies, capabilities, talent and geographic footprints to bring clients superior, data-driven outcomes," John Wren, Omnicom CEO said in a statement on Monday.

Philippe Krakowsky, IPG's CEO, said the two companies had "highly complementary offerings, geographic presence, and cultures."

Wren will remain CEO of Omnicom, while Krakowsky and current Omnicom COO Daryl Simm will be copresidents and co-COOs of Omnicom. Three members of the IPG board, including Krakowsky, will join the Omnicom board.