Omnicom-IPG’s Strong AI Front Could Protect Against Big Tech

On December 13, 1996, Miller Beer pulled all its business out of Leo Burnett, literally overnight. Officially, it was about lackluster sales, but rumors abounded that Miller discovered a subsidiary of Burnett had taken a small project from Anheuser-Busch, and Miller was livid.

Now that holding companies own a huge part of the advertising landscape, corporations are more likely to live with the fact that their ad agency belongs to a family of companies that may also serve a rival. But other than both CEOs playing golf with the conglomerate’s CEO (not at the same time), there’s no overlap. Each subsidiary agency’s creative and account departments are hermetically sealed off from every other one in the network—which may be more a financial arrangement than an actual network. And depending on how picky the clients are, the same goes for media, though economies of scale make wholesale buying more attractive.

The evening after Omnicom and IPG crashed together like two land masses forming a supercontinent, I happened to be teaching my History of Advertising class, and my students were curious about how the corporate leaders justified the merger, which is, in truth, more of a takeover of IPG by Omnicom.

Was it about money? It’s always about money, but why now? They tried to merge years ago; it’s a better climate today with Trump heading back to the White House, but that doesn’t explain it all.

I consulted Google Search Labs’ new, somewhat annoying “AI Overview,” asking it to list the advantages of the merger. All except the last point seemed like a list of platitudes about being stronger by sharing their resources. Let’s face it, many of those resources are, as mentioned above, proprietary to rival clients. And why share? Both Omnicom and IPG are so enormous and have—like Mel Brooks’ Engulf & Devour—become complete advertising and communications planets in their own right.

The final point in the AI-generated list was both a eureka and a déjà vu moment for me: “The merger, which would create the world’s largest ad agency, comes as the industry faces challenges from generative AI and other technological shifts.” In other words, there’s enormous concern that digital corporations will set AI free to create, execute, and place advertising, thereby making ad agencies obsolete. Kind of like self-driving cars making driving obsolete.