The Omnicom restructuring exercise was like watching Game of Thrones on the digital news screens with the power shifting hands, collapse of ancient empires and building of new alliances. It was also in equal parts bloody considering the 4000 jobs that will further be at stake globally with the integration of the merged entity.
The new scheme of things is confusing enough for the industry (refer to the musical chairs in second last para), additionally, with client conflicts likely to arise out of multiple competing agencies folded into one group, it may be quite a daunting task to pull them all successfully under one umbrella.
Just to give the example of automobile as a category, for e.g., Volkswagen India (passenger vehicle business) was handled by DDB Mudra and 22 feet Tribal, a big part of the former agency is likely to fold into McCann Worldgroup say sources, and the latter brand is expected to share a name with Kinnect forming Kinnect X 22feet Tribal. Interestingly, if sources are to be believed, parts of FCB shall also fold into McCann, even as details are not known on which agencies will. FCB Ulka and FCB Kinnect both handled a fair bit of Tata Motors’ business (passenger vehicle and EV). The question then is will Volkswagen and Tata Motors end up in the same agency and cause any kind of client conflict? An Omnicom Advertising India Spokesperson clarified exclusively to IMPACT, “The BBDO Group will comprise BBDO India, Ulka and Mudra. While it is true that based on client considerations & continuity some parts of FCB and DDB will be moved into McCann and BBDO Group, however, there will be a multi-market team servicing Volkswagen known as Bernbach, in recognition of DDB founder Bill Bernbach’s relationship with the car marque. As stated earlier, leadership announcements will be made when ready for release.” OA India is implying that there will be no client conflict in the above case.
Mergers in the past, however have demonstrated the need for tough decisions, and in some cases how agencies had to forsake some brands as part of collateral damage, owing to client conflicts. With multiple agencies folding into each other, high level discussions are on at the leadership level here at Omnicom too, on how to tread carefully to cause minimum loss, if at all.
A marketer working for an automobile brand tells IMPACT, “Usually brands like Tata Motors choose to sign exclusive contracts with agencies to avoid having the agency work on a competitor’s brand at the same time. Particularly, when big launches are involved and secrecy becomes crucial. Agencies have time and again circumvented this challenge by launching a sister agency under the same network which can work on a competitor’s brand. The client may agree to it, but it is highly unlikely that a client will agree to the same agency working with two clients who directly compete in the category. There is always the possibility of a shared intel even if the agency promises airtight teams, considering most networks have one P&L for their many agencies, and they are working in the interest of the entire group. So, it becomes risky for the client.”
On the media side, in the luxury car category — Audi works with PHD Media (Omnicom) currently and Volvo works with Initiative (IPG). OMG recently won the Tata Motors (passenger cars) media account while Mahindra (passenger cars) works with Lodestar UM (IPG). Sources tell IMPACT that discussions on the fate of the media agency brands are still underway and currently there is no plan to merge or dilute the big names on either side, considering the large client mandates they handle. With the big businesses riding on it, it would not be wise to risk losing a brand owing to client conflict. Interestingly, revenue wise IPG Mediabrands has had an upper hand in India, despite Omnicom’s acquisition of IPG, with IPG Mediabrands managing to close $2 billion in billings in 2024 which is believed to be far more than double of what Omnicom Media Group billed in the same period.
Sources have told IMPACT that discussions with brands where teams will not change started a short while ago, while those clients whose business will move into another agency are anxious, because of lack of clarity. It is imperative to retain client confidence at this point by taking them into confidence on the planned steps. But insiders say it is not taking place at the pace it needs to be done in.
IMPACT spoke to a few brands which will have to be moved from the IPG umbrella to the Omnicom umbrella, on how smooth the transition has been this far. On the creative side, one client which is becoming part of the merged entity — TBWA/Lintas said, “We don’t have any concern at this point, so far there will be no change in the team we work with at the agency, but even if that happens, we are not worried, because changes in the team that services us take place even otherwise without any merger.”
Another brand marketer who works with the formerly IPG agency, Initiative told IMPACT, “They were well prepared and started before schedule to make the transition into Omnicom Media seamless for us, as a client.”
A third marketer whose brand has been serviced by Lodestar for years shared with IMPACT, “There has been no change for us, those who were working for our brand continue to do so. As far as client conflict because of some of our competitors working with OMG are concerned, we are told that the teams will be kept separate. I am not too concerned about the future right now and will allow this to settle down a little before passing a judgement on the state of affairs.”
On the agency front, at a personnel level, there is uncertainty on who will be clubbed with whom, under which of the newly finalised agency brands. With Group announcement coming in stages about the future of each vertical and in the absence of a clear channel of communication, several agency leaders besides the top layer, are in a flux, raising questions on whether this could have been handled better. Also, there is ambiguity on who from their teams will stay and who will be given the boot in the near future. The next big announcement is expected in the first week of January.
As far as synergies are concerned, as the discussions are at a nascent stage there is no clarity on whether all Omnicom agencies will be housed under one roof as is the trend with holding companies these days. At this point it appears to be business as usual with each staying where they are.
On the media agency business, besides the four Group roles, namely Kartik Sharma, Shashi Sinha, Amardeep Singh and Rishit Mehta, little has been spoken about the leadership of individual agencies, on whether there will be a change or status quo.
Also, to explain the musical chairs that transpired in India simply — Prasoon Joshi from formerly IPG’s McCann was moved to head Omnicom Advertising India, while Dheeraj Sinha from then IPG’s FCB slid into a McCann role, even as the name FCB was snuffed out. Joining him at then IPG’s McCann is Rahul Mathew who drove straight from DDB Mudra, an agency whose obituary was quietly written by its masters at Omnicom. Subramanyeswar aka Subbu from IPG’s MullenLowe Lintas Group ended up in a Group role at Omnicom Advertising India as CSO, while his agency name was partly axed, with only Lintas surviving. Prateek Bhardwaj from IPG’s Lowe Lintas and Govind Pandey from Omnicom’s TBWA, two competing agencies join forces to make TBWA/Lintas while IPG’s FCB Kinnect comes together with Omnicom’s 22 feet Tribal to form Kinnect X 22feet Tribal led by Chandni Shah. Rohan Mehta goes from leading a single agency — IPG’s FCB Kinnect to a group role at Omnicom Advertising India to push their digital integration. Only Josy Paul and Aditya Kanthy stay where they were – at BBDO; and at OA India, in a Group role as President and MD, respectively. Whether it will be a culture mismatch or a giant success with most leaders moved to an altogether different unit, only time can tell.
While those who grabbed a seat in this game of musical chairs, heaved a sigh of relief, sources say questions are being raised internally on the allotment of portfolios. Even as those who haven’t won so far in the game are waiting for the music to start again.
