Advertising Age reported Omnicom is prematurely taking advantage of its network of White advertising agencies and simultaneously escalating Corporate Cultural Collusion. That is, Omnicom (via BBDO) and IPG (via FCB) are teaming up to tackle the Kenvue pitch.
BBDO and FCB are currently separately serving the Tylenol marketer.
So, what happens if the client chooses certain talent from each White advertising agency and the people become redundant—and unemployed—when the Omnicom acquisition of IPG closes? Then again, it’s moot since Omnicom and IPG have effectively commoditized Adland, rendering all talent generic, exchangeable, and replaceable.
Wonder if twice the number of multicultural marketing firms will experience Prime Redlining in the review.
President Donald J. Trump and Secretary of Health and Human Services Robert F. Kennedy Jr. have already criticized pharmaceutical marketing. Will the political leaders address the questionable business tactics of pharmaceutical marketing practitioners?
Omnicom and IPG team up on Kenvue review in first big test of the pending merger
By Brian Bonilla
The first major test of how successful Omnicom Group’s acquisition of Interpublic Group of Cos. will be is unfolding in one of the biggest pitches of the year. The two ad giants are jointly pitching Kenvue, which launched a global creative and media review in September, according to three people familiar with the situation.
Omnicom and IPG are believed to be working together across both creative and media. Omnicom’s BBDO and IPG’s FCB—each of which currently works with the Tylenol marketer—are collaborating on the pitch, Ad Age has learned. Kenvue’s agency roster includes IPG and Publicis Groupe on media globally, along with IPG’s Deutsch and Stagwell’s Doner.
Omnicom and IPG referred calls to Kenvue, which did not return a request for comment.
Omnicom said last week that it expects its acquisition of IPG to close by the end of November. The European Union is the last remaining jurisdiction that must approve the deal. Executives from both companies have repeatedly said they will continue to operate independently until the transaction—set to create the world’s largest advertising agency group by revenue—closes.
“We’re still operating as two independent companies until we get through the regulatory period,” said John Wren, Omnicom’s chairman and CEO, during the company’s earnings call in February.
Omnicom reiterated its position in a statement to Ad Age this week, following requests for comment on rumors that the combined company might retire Omnicom’s DDB network. Industry speculation has suggested that the merged holding company could streamline its creative operations around three primary networks—BBDO, McCann and TBWA.
“As regulatory approvals are still pending and until the transaction is closed, we are still operating as two independent companies,” Omnicom stated. “However, we can share that, as it relates to our brands, we are undertaking a rigorous and considered process to ensure we have the very best solutions for the future for us and for our clients. This sentiment is informing everything we do in our go-forward plans.”
Competitors pitching together
In pitching together, the pending merger partners will have to tread carefully, according to an advertising attorney who is also a former government official. In an interview with Ad Age, the attorney said that if not handled properly, the two entities could be in danger of violating parts of the Sherman Act, which prohibits companies from working together to fix prices or to create monopolies that hurt competition.
“To the extent that they are competitors, Section 1 of the Sherman Act still applies, and if they have agreements that reduce competition between them, that can still be a problem,” said the lawyer, who spoke on condition of anonymity.
That said, the attorney noted there are also practicalities at play. “If they go to a [potential client] and say ‘Hey, look, we’d like to bid together because we expect to close in a month. Is that OK with you?’ That may not be an issue,” said the attorney. “If they say ‘Hey, we’ll bid separately, but we’ll also tell you that if the merger happens, this is what we will be able to do—we’ll be able to lower the price or something like that, that may be OK.’”
The topic of Omnicom and IPG working together on pitches has recently surfaced publicly. During Omnicom’s third-quarter earnings call, Wren addressed a question from an analyst about how clients are responding to the impending merger.
“We’ll be able to be even stronger when we’re able to function together,” Wren said on the earnings call earlier this month. “So far, we’ve had to pitch everything kind of independently as if we’re still two independent companies. But hopefully, that will change on the completion of the deal.”
When asked by an analyst on the call whether clients are expressing interest in the combined offering, Wren noted that the response has been “very positive,” citing Bayer as an example. Bayer “wanted to see us pitch separately and then, at the very end, asked—or demanded—that we answer a few questions about what it will look like post-deal,” he said.
Bayer ultimately decided to consolidate global media, creative and production with IPG. The company nodded to the Omnicom-IPG deal in its review announcement, with Consumer Health Chief Marketing and Scientific Officer David Evendon-Challis noting the “opportunity of what is possible” when the merger is complete.
Along with Omnicom and IPG, Publicis and WPP are also competing in Kenvue’s review, according to people close to the situation. The review comes amid a broader marketing shakeup at the health care company.
Publicis and WPP declined to comment.
Kenvue plans to name Jon Halvorson as its chief marketing officer imminently. Halvorson, who joins from Oreo maker Mondelēz International, previously worked at both Publicis and Omnicom, according to his LinkedIn profile.
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