EXCLUSIVE: Inside Omnicom and IPG's Secret Meeting to Sell Clients on the Takeover

Omnicom and IPG on Wednesday hosted a meeting in New York City with agency search consultants — who help brands find agency partners — to answer their clients’ most pressing questions about the impending takeover, ADWEEK has learned. Both an Omnicom and IPG spokesperson confirmed that the meeting took place but declined to provide further details. According to two sources who attended the meeting, Omnicom CEO John Wren and IPG CEO Philippe Krakowsky explained how the new offering will benefit clients. It was the second such meeting the pair have hosted. A similar event took place in London about a month ago, according to Ebiquity CEO Ruben Schreurs, who attended that meeting, but not the one in New York. Some attendees were concerned that Omnicom's takeover of IPG wouldn't happen, according to the people at the New York meeting. While neither holdco CEO could share new information due to regulatory concerns, both projected confidence that the deal would go through. According to one source, the meeting was framed as a forum for addressing questions and aimed to “get people really focused on the benefits and positives” of the merger. But it was also an opportunity for IPG and Omnicom to fish for information about client concerns and “over-communicate” as speculation about the new offering swirls, according to the second source at the meeting. While the two sources left the meeting feeling positive about the merger, questions raised indicate the biggest lingering doubts that clients have. Should Omnicom be favored over IPG in pitches? The people in attendance were most concerned about the future of IPG agencies, since it is the entity being acquired, according to ADWEEK's sources. Consultants asked if they should favor Omnicom in pitches as the bigger player. Wren and Krakowsky said both companies will continue to invest in their offerings and operate separately this year, ADWEEK's sources said, and doubled down on the claim that they don’t plan to kill off existing agency brands. “They did very solidly answer that they didn't go into this thinking they were going to reduce the number of brands,” one consultant said. Both leaders sought to differentiate the impending takeover from other holdcos that had sunset iconic agency brands after a consolidation. They also spoke of investing more in global client leads to help facilitate collaboration across the network, according to both sources. One skeptical consultant who spoke with ADWEEK is waiting to see how those promises actually manifest, given the incentives of current P&L models. “Choice from a client perspective sounds positive, but it’s much more difficult to operationalize,” this person said. “I think that’s something we need to see in practice.” Will agency talent be impacted? The takeover has promised to generate $750 million in cost synergies. But it's not clear what that will mean for staff. The consultants at the meeting wanted to know if the teams they hired would be the team working on their business in a year, ADWEEK's sources said. While layoffs will be inevitable, both Wren and Krakowsky were firm in their messaging that client-facing roles will not be impacted, ADWEEK's sources said. The holdco CEOs had echoed this sentiment in London as well. “They re-emphasized the fact that sales or revenue-generating staff are safe,” said Schreurs, speaking of the London meeting. “But they are definitely going to make redundancies.” Wren did say the $750 million in savings would mean cuts in back-office roles. Both CEOs sought to soothe concerns that senior leadership will be distracted and take their eyes off of clients, and said they have launched a separate team to work on the merger, and have also hired consultants to help with the process. But not everyone is convinced. As one consultant put it, “the proof is going to be in the pudding.” Will clients still get the most favorable pricing? Attendees wondered how Omnicom and IPG will honor previous negotiations with clients, and for clients working with both entities, whether or not the merged holdco will honor the more favorable terms. “When you get to the nitty-gritty, [there are] extremely detailed commitments, like the people on the business, risk mitigation factors, how you will or will not use data, cost negotiations," one consultant said. "Will that be honored in this new entity?” This is likely to come up in principal media buying arrangements, which both Omnicom and IPG had cited as a major driver of the deal. Wren and Krakowsky said at the meeting that they were committed to doing what's best for clients, one source said. What’s the upside for brands? According to the consultants, their brand clients most wanted to understand the upside of working with a combined Omnicom-IPG entity. Wren and Krakowsky pointed to the synergies that will exist between data platform Omni, commerce agency FlyWheel, and data provider Acxiom. The two holdco leaders also said they'd be in a stronger position financially to make future acquisitions to strengthen that technology backbone, the sources said. As ADWEEK previously reported, there is a lot of work that needs to be done to improve this data strategy. “Acxiom is really central to this,” Schreurs said. “Combined with the skill of both agencies, it's a fierce competitor to Epsilon. And they've been, in a competitive landscape, hurt by Epsilon’s success.”

Omnicom-IPG

EXCLUSIVE: Inside Omnicom and IPG's Secret Meeting to Sell Clients on the Takeover

Read the holdco leaders' answers to 4 burning questions agency search consultants asked

Alison Weissbrot

Lucinda Southern

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