Omnicom has folded three of its iconic creative agency brands and cut 4,000 jobs in its first post-acquisition shake up.
Three creative agency networks that will now wave the Omnicom flag: BBDO Worldwide, TBWA\Worldwide and Interpublic’s McCann Worldgroup.
Media and PR agencies remain unaffected by the sweeping changes, for now.
As B&T first reported in October, Omnicom was planning to whittle down its creative division into three power brands post acquisition, which would include sunsetting the iconic DDB brand. The FCB and MullenLowe brands have also been retired.
In Australia, DDB will merge with Clemenger BBDO, creating a single national agency under the Clemenger BBDO brand.
DDB’s Sheryl Marjoram (Sydney) and Mike Napolitano (Melbourne) have been appointed co-CEOs of Clemenger BBDO Australia, responsible for leading the national agency and shaping its creative, media, strategic and operational direction.
This move sees Lee Leggett, the current CEO of Clemenger BBDO, transition into a newly-created role, chief customer officer of Omnicom Oceania.
In its most recent B&T Agency Scorecard, DDB Australia reported 288 staff and is led by Sheryl Marjoram in Sydney and Mike Napolitano in Melbourne, with clients including Coles and Dulux.
Clemenger BBDO reported 350 staff with clients including Samsung, Mazda and Asahi Group.
In New Zealand, DDB Group Aotearoa and FCB Group Aotearoa will merge to form McCann Group NZ, a new unified creative and media agency network.
Priya Patel (CEO, DDB Group Aotearoa) and Paul Wilson (CEO, FCB Group Aotearoa) have been appointed Co-CEOs of McCann Group NZ.
In Wellington, Clemenger Wellington and FCB Wellington will rebrand as McCann Wellington, operating as part of McCann Group NZ. Omnicom said the local leadership for McCann Wellington will be announced shortly.
“This is a defining moment for our region. By bringing together the depth, ambition and talent of our people, while simplifying the architecture, we are creating modern, future-fit agencies and capabilities that will deliver world-class creativity & media, smarter data and technology integration, and new levels of effectiveness for brands in Australia and New Zealand,” Nick Garrett, CEO Omnicom Oceania said in a press statement.
“I want to congratulate Priya Patel, Paul Wilson, Sheryl Marjoram, Mike Napolitano and Lee Leggett on their new roles. Their leadership will play a critical part in shaping the next era of Omnicom Oceania. These changes honour the legacies of our heritage brands while positioning us to unlock even greater opportunity, effectiveness and growth for our clients and our people.”
HERO, 303 MullenLowe & media
Globally, the story is different. Interpublic’s MullenLowe will be folded into TBWA\Worldwide; although this doesn’t impact the day-to-day business of the agency 303 MullenLowe, which has offices in Australia and New Zealand.
Interpublic previously sold a majority stake to 303 MullenLowe to the Kiwi holding company, Attivo Group. Today, the agency dropped the ‘MullenLowe’ name and will now trade as ‘303’.
McCann Australia, an independently-owned Australian affiliate of McCann Worldwide, and its local independent partner agency HERO, will remain unaffected, B&T understands.
In today’s announcement, all of Omnicom and IPG Mediabrands media agencies (OMD, PHD, Hearts & Science, UM, Initiative and MediaHub) are unaffected and remain as “distinct client-first agencies”.
Omnicom will need to make a call on the fate of IPG Mediabrands’ top brass, including chief executive Mark Coad and APAC boss Leigh Terry.
How long Omnicom’s media agencies remain untouched remains to be seen.
One senior industry leader, who spoke to B&T anonymously, believes the creative agency consolidation is merely a “thunder storm” before the “media monsoon”.
“Creative is the easy shit,” the executive said. “The big calls are, what the fuck do we do with all the media agency brands? And that’s a really complicated bowl of spaghetti to sort of unravel; they’ll be madly working away on that.
“Ultimately, that’s what [Wall Street] is going to be looking in their next earnings. When they are a combined entity, they’re going to want to know where are you getting the operational efficiencies? What brands are you sunsetting? Where can you create integration for senior management?
“Why would you pay five, six or seven CEOs and CFOs to all do essentially the same thing. It is just not a sustainable situation. So I think this is the calm before the storm.”
TrinityP3 founder and global CEO Darren Woolley told B&T that there is no urgent need to consolidate the media agencies to much because a lot of media planning and buying services will be consolidated at a group level.
“My understanding is that they’re looking to consolidate as much as possible, and most of these brands will become just front doors to manage conflict,” he said. “And when you think about it, in this day and age, media, particularly with things like principal trading, is still the big cash cow for the holding companies. So why would you take potential risk?”
B&T has heard whispers that Hearts & Science may eventually fold into one of the larger shops. MediaHub in Australia is another that may move into a larger sibling.
Consolidating media agencies, and the vast volume of client billings each network controls, can be a conflict headache and needs to be managed carefully.
There has also been no news on the state of Omnicom and Interpublic’s PR and communications agencies, which include
Golin and Weber Shandwick (IPG) and FleishmanHillard, Ketchum and Porter Novelli (Omnicom).
As B&T predicted yesterday, there is not much to be gained by merging these agencies at this point in time.
The global picture
Australia and New Zealand’s reshuffle are not aligned with Omnicom’s global plan. DDB Worldwide is consolidating into TBWA\Worldwide, and FCB is merging with the BBDO Worldwide network
Questions have been raised in some major markets why the award-winning FCB was culled in place of McCann.
New Omnicom Advertising CEO Troy Ruhanen, an Aussie who previously led TBWA Worldwide, said that although FCB is strong in the US, Canada, London, India and New Zealand, it lacks the global footprint of McCann Worldwide.
He told the US advertising publication AdAge: “You can’t build a case for global clients and be able to really make sure that you can deliver connected capabilities … [by FCB only] appearing in four of the top 10 markets in the world. You’ve got to be much more than that.
“McCann is much more well understood. There’s much more definition. What it needs is a bolster in talent.”
Omnicom chairman and CEO John Wren said that FCB and BBDO had already collaborated on the Kenvue pitch and were culturally aligned.
On the survival of TBWA, Ruhanen pointed out that the ‘Disruption’ market positioning was already well established and that adding DDB and MullenLowe would enhance its creative
Adam&Eve will merge into TBWA in the UK, US and German markets. In London, the agency will be known as adam&eve TBWA. A special bespoke DDB branded unit will continue to service Volkswagen.
The acquisition positions Omnicom Group as the largest advertising holding company in the world, with revenues of $26.4 billion (A$40.35 billion), ahead of Accenture Song, Publicis Groupe and WPP.
After the acquisition, Omnicom expects to end up with 105,000 employees worldwide, which includes 85 per cent professional and 15 per cent back office, a decline of about 23,200 employees from the companies’ combined headcount of 128,200 at the end of 2024, according to an article in AdAge.
Omnicom executives framed the merger as a technology play as much as an agency consolidation, repeatedly arguing that the combined company now owns the strongest data, identity and platform foundation in the industry.
Omnicom’s business group leaders
- Florian Adamski, CEO, Omnicom Media, including Hearts & Science, Initiative, Mediahub, OMD, PHD, and UM, as well as Acxiom.
- Chris Foster, CEO, Omnicom Public Relations, including FleishmanHillard, Golin, Ketchum, Porter Novelli, and Weber Shandwick.
- Sergio Lopez, CEO, Omnicom Production, including Content Solutions, Production Management, and Studios.
- Duncan Painter, CEO, Omni and Flywheel Commerce Network, featuring Omni, the advanced intelligence platform that will power all capabilities, and Flywheel, the market-leading commerce group.
- Troy Ruhanen, CEO, Omnicom Advertising, including BBDO, McCann, TBWA, and the U.S. Advertising Collective
- Michael Larson, CEO, Diversified Agency Services, with reports including:
- Dana Maiman, CEO, Omnicom Health, including Healthcare Professional & Consumer, Medical Communications, Patient Engagement, and Managed Markets.
- Mark O’Brien, CEO, Omnicom Branding, including Interbrand, Siegel+Gale, Sterling Brands, and Wolff Olins.
- Luke Taylor, CEO, Omnicom Precision Marketing, including Credera, Critical Mass, and RAPP.
