As Omnicom and Publicis merge, rivals prepare to snare clients

Thu Nov 21, 2013 4:08pm EST
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By Kate Holton, Paul Sandle and Leila Abboud

BARCELONA (Reuters) - Three major rivals to advertising groups Omnicom (OMC.N: Quote) and Publicis (PUBP.PA: Quote), which are merging, say they are poaching work from the pair by luring clients who are unsettled by the $35.1 billion deal.

Market leader WPP (WPP.L: Quote), fourth-placed Interpublic Group (IPG.N: Quote) (IPG) and Japan's fifth-placed Dentsu (4324.T: Quote) said they had either begun to win work or believed they could do so as major brands bristle at the coming together of the industry's second and third largest players.

Also up for grabs, the three groups said, were the more than 130,000 Omnicom and Publicis staff across five continents who could defect as the two holding companies focus on stitching their agencies into a new group.

"It certainly has disturbed the client base and it certainly has disturbed the staff," WPP Chief Executive Martin Sorrell told the Morgan Stanley investor conference in Barcelona.

"Clients are not going to come out and say 'I'm firing an agency' because they merged. But if you watch the rooms carefully, there are changing patterns of distribution in the business which will benefit us."

Omnicom and Publicis revealed plans to merge in July this year, sparking a scramble for their blue-chip clients who are worried the new firm might face conflicts of interest.

Without any defections, the Franco-U.S. giant would bring the accounts of major competitors in a number of industries such as Apple (AAPL.O: Quote) and Samsung (005930.KS: Quote), or Coca-Cola (KO.N: Quote) and PepsiCo (PEP.N: Quote), under one roof.

It will also bring together Publicis agencies such as Saatchi & Saatchi and Leo Burnett with Omnicom's BBDO Worldwide and DDB Worldwide.   Continued...