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 clear client conflicts arising out of multiple competing agencies folded into one group, it may be quite a daunting task to pull them all successfully into one Group together.
Just to give the example of automobile as a category, for e.g., Volkswagen India (passenger business) was handled by the DDB Mudra and 22 feet Tribal, each will fold and merge into/with McCann and Kinnect respectively. Interestingly, FCB shall also fold into McCann. FCB Ulka and FCB Kinnect both handled a fair bit of Tata Motors (passenger vehicle and EV) business. Basically, Volkswagen and Tata Motors might end up in the same agency, the question is, will that affect the client in any way? With multiple agencies folding into each other, high level discussions are on at the leadership level on how to move forward and which brands will have to be forsaken as part of collateral damage.
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, which the client may agree to, 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 more than double of what Omnicom Media Group billed in the same period.
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 happens 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.”
However, there is uncertainty on the agency front, with Group announcement coming in stages about the future of each vertical, in fact several agency leaders are in a flux, in the absence of a clear channel of communication with growing uncertainty on who from their large teams will stay and who will be given the boot in the near future.
As far as synergies are concerned, there seem to be plans to move all the creative agencies to Mudra house under one roof. While media agencies may be housed elsewhere. On the media agency business, besides the four Group roles, little has been spoken about on the leadership of individual agencies, 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 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 gets merged 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 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 musical chairs, have heaved a sigh of relief, sources say questions are being raised internally on the allotment of portfolios. While those who haven’t won so far in the game are waiting for the music to start again.
