Why the Publicis-Omnicom Merger is Historical

Photo: euronews

[Original article here (in French).]

"Half the money I spend on advertising is wasted; the trouble is I don't know which half." This was how John Wanamaker defined the challenge for advertisers way back in 1890. How can one know if consumers buy my brand from only seeing my ads on t.v., my website, or in the papers or simply because they enjoy my product? Marketers have been faced with this practically insoluble puzzle for over one hundred and twenty years because of the absence of tools and relevant data.

The good news is that digital emergence is changing this reality. On the one hand, the Internet, mobile and TV continue to become more connected, and with this more data with which we can exploit. On the other, with cloud, along with NoSQL technologies, it is now possible to manage low costs; with monumental amounts of data in real time.

With Big Data, advertisers will be able to know precisely what contributes to their buying decisions at large. These could be  advertisements, marketing channels, exogenous factors, i.e. competition, the weather, the state of opinion, or even the intrinsic qualities of the product, such as price. This is a major revolution in the Copernican sense. It is an axis of change and of perspectives that reshape the way we think about brand communication.

Marketing is no longer a cost center, but a profit center. Though campaigns begin a year in advance, they are organized and optimized in real-time. Technology is no longer a peripheral issue, and performance is at the heart of the process. In this new market, the new players are not just contacting Marketing consultants, but also (and especially) technology companies that provide solutions to reach the consumer directly and understand how they interact with brands. In a data-dominated Communication industry, the value is placed on the process of shifting from content creation to technology and dissemination of digital content. By simply looking at the market capitalization and profit rates of technology companies such as Google, Microsoft, Adobe and IBM, and traditional players like WPP, Interpublic and Havas, the results are quite convincing.

In this context, it is imperative that one must understand the merger of Publicis and Omnicom.

By joining forces, the new Publicis Omnicom Group will hit a critical mass that will allow them to confront the "pure players" technology method. Whether in terms of acquisition, with which 30 billion has been valuated, the new merged organization will be able to compete with the likes of Yahoo!'s R&D, where synergies will free up resources to innovate and create proprietary solutions. Thanks to the diversity and strength of its clients, the now data efficient Publicis Omnicom will start off just like how Google or Facebook did, data omniscient. From Publicis's skill at being a data processing conglomerate, and Omnicom's networking expertise, the result of these achievements will determine the success, or not, of this merger.

This fusion can be perceived only through the prism of the financial package, as errors remain within the analytics of the merger. The  Omnicom-Publicis merger is the first intelligent and bold structural response in the era of post-marketing data.

In this sense, it will remain a historical milestone in advertising and marketing.

Faithfully yours,

The Captain