On December 13, 1996, Miller Beer pulled all its enterprise out of Leo Burnett, actually in a single day. Formally, it was about lackluster gross sales, however rumors abounded that Miller found a subsidiary of Burnett had taken a small mission from Anheuser-Busch, and Miller was furious.
Now that holding firms personal an enormous half of the promoting panorama, firms usually tend to stay with the truth that their advert company belongs to a household of firms that will additionally serve a rival. However aside from each CEOs enjoying golf with the conglomerate’s CEO (not on the similar time), there’s no overlap. Every subsidiary company’s artistic and account departments are hermetically sealed off from each different one within the community—which can be extra a monetary association than an precise community. And relying on how choosy the shoppers are, the identical goes for media, although economies of scale make wholesale shopping for extra engaging.
The night after Omnicom and IPG crashed collectively like two land plenty forming a supercontinent, I occurred to be instructing my Historical past of Promoting class, and my college students had been inquisitive about how the company leaders justified the merger, which is, in reality, extra of a takeover of IPG by Omnicom.
Was it about cash? It’s at all times about cash, however why now? They tried to merge years in the past; it’s a greater local weather immediately with Trump heading again to the White Home, however that doesn’t clarify all of it.
I consulted Google Search Labs’ new, considerably annoying “AI Overview,” asking it to checklist some great benefits of the merger. All besides the final level appeared like a listing of platitudes about being stronger by sharing their assets. Let’s face it, lots of these assets are, as talked about above, proprietary to rival shoppers. And why share? Each Omnicom and IPG are so huge and have—like Mel Brooks’ Engulf & Devour—turn into full promoting and communications planets in their very own proper.
The ultimate level within the AI-generated checklist was each a eureka and a déjà vu second for me: “The merger, which might create the world’s largest advert company, comes because the trade faces challenges from generative AI and different technological shifts.” In different phrases, there’s huge concern that digital firms will set AI free to create, execute, and place promoting, thereby making advert companies out of date. Sort of like self-driving automobiles making driving out of date.
