On Monday (9 Dec.), holding company Omnicom announced that its board of directors has unanimously approved a deal to acquire The Interpublic Group (IPG), itself a holdco of several major agencies.
Previously, Omnicom and IPG represented the world’s third-and fourth-largest ad buyers, respectively. Merging will likely put Omnicom on top and make it the largest holdco.
It is currently ranked as the third-largest advertising holding company globally by revenue, reporting $14.7 billion in 2023 and followed by IPG at $10.9 billion. WPP and Publicis Groupe are the two largest at $18.5 billion and $15.8 billion, respectively.
The acquisition further consolidates the largest ad agencies, during a time when more ad spend has shifted to in-house marketers. According to Advertiser Perceptions, the big six holding companies (Publicis, WPP, Omnicom, IPG, Dentsu, and Havas) controlled 29.6% of total US ad spending in the first quarter of 2024 – significantly down from the 44% they controlled in 2019.
Omnicom was created in 1986 as part of a three-way merger of three of the largest advertising agencies in the U.S., BBDO, Doyle Dane Bernbach (DDB) and Needham Harper Worldwide; other of its iconic agency brands include TBWA, Goodby Silverstein & Partners and more.
A global leader in marketing communications, the company offers a wide range of services in advertising, strategic media planning and buying, precision marketing, retail and digital commerce, branding, experiential, public relations, healthcare marketing and other specialty marketing services to over 5,000 clients in more than 70 countries.
As for IPG, its global brands include The Martin agency, Acxiom, Craft, FCB, FutureBrand, Golin, Initiative, IPG Health, IPG Mediabrands, Jack Morton, KINESSO, MAGNA, McCann, Mediahub, Momentum, MRM, MullenLowe, Octagon, UM, Weber Shandwick and more.
IPG has struggled to grow revenues and has been offloading some assets to invest in digital growth. Just last week, IPG announced it sold digital experiences agency Huge to private equity and acquired retail analytics firm Intelligence Node.
Together, the companies will expand their capacity to create comprehensive full-funnel solutions that deliver better outcomes for the world’s most sophisticated clients.
The new Omnicom will have over 100,000 expert practitioners. The company will deliver end-to-end services across media, precision marketing, CRM, data, digital commerce, advertising, healthcare, public relations and branding.
Current Omnicom Chairman and CEO John Wren will remain in his position; Phil Angelastro will remain EVP & CFO of Omnicom, while IPG CEO Philippe Krakowsky will join Daryl Simm as co-president and COO of Omnicom.
Three current members of the Interpublic Board of Directors, including Philippe Krakowsky, will be welcomed to the Omnicom Board of Directors.
“This strategic acquisition creates significant value for both sets of shareholders by combining world-class, highly complementary data and technology platforms enabling new offerings to better serve our clients and drive growth,” said John Wren, Chairman & CEO of Omnicom.
“Through this combination, we are poised to accelerate innovation and harness the significant opportunities created by new technologies in this era of exponential change. Now is the perfect time to bring together our technologies, capabilities, talent and geographic footprints to bring clients superior, data-driven outcomes. We are excited to welcome Philippe and the entire Interpublic team to the Omnicom family.”
“This combination represents a tremendous strategic opportunity for our stakeholders, amplifying our investments in platform capabilities and talent as part of a more expansive network,” said Philippe Krakowsky, Interpublic’s CEO.
“Our two companies have highly complementary offerings, geographic presence and cultures. We also share a foundational belief in the power of ideas, enabled by technology and data. By joining Omnicom, we are creating a uniquely comprehensive portfolio of services that will make us the most powerful marketing and sales partner in a world that’s changing at speed. We look forward to working with John and the entire Omnicom team.”
It is worth mentioning that it's been over a decade since two major holding groups tried to combine. Omnicom and Publicis announced a merger in July 2013, but it fell apart less than a year later.
According to Reuters, the deal comes out to a whopping $13.25 billion – roughly half of both companies’ combined revenue of 2023, around $25.6 billion – and is expected to close in the second half of 2025.
This consolidation deal is sure to spark additional deals by other ad firms seeking to compete with the new industry behemoth.
