Publicis-Omnicom Merger Provides Much Needed Opportunity To 'Step Up'

Few mega deals bring the value promisedThe merging of Omnicom with Publicis offers a phenomenal opportunity to both companies amp8211 that ultimately benefits their customers to take a muchneeded step back to focus on creating real value from their combinationThe merger of these two massive ad holding companies formerly the number 2 and 3 players behind Martin Sorrellamp8217s WPP looks remarkably like another era of major consolidation from around 1990 until about 2000 when the number of banks in the US shrunk by more than 40Throughout that period few consolidated bank holding companies delivered the value they forecasted when they announced their deals Indeed in a 1998 review Federal Reserve members Steven Pilloff and Anthony Santomero argued that mergers that year yielded little benefit or none at all and that the combined company39s market value was on average no higher than the value of its parts There were of course a few notable exceptions to this rule eg US Bancorp but there can be little debate that massive companiesamp8217 ability to capture anticipated synergies and market benefit is mixed at bestWhatamp8217s also clear is that when combinations of this size are successful it happens when executive management continually challenges its leaders to clearly identify the specific opportunities available and ensure that they are achievedSo how does Publicis Omnicom Groupe address the marketamp8217s overall skepticism on their deal and effectively wring the full potential out of their combined entity Experience as you may have suspected I had a front row seat during those banking years suggests there are four critical steps for team LevyWren each with stiff challenges for POIdentify clear leadership This will be a real test in a company with two CEOs Messrs Wren and Levy have agreed to share the role for two years In successful mergers the CEO takes control over crucial dependencies makes tough decisions and prepares to spend a lot of time executing the consolidation plan Without this control and decisiveness there is a real risk that critical time will be wasted with senior management vying for positions in the new organizationGet all levels of the organization involved The first step in this process is to appoint executives from all major business units to an integration group responsible for prioritizing issues and coordinating efforts The challenges for PO unfortunately abound on this front as well as the cultures of these two organizations are so substantially different Who serves in the integration group will make for tough decisions at the top and cultural differences will further complicate the role of top leadershipThere must be specificity that allows the organization to accurately identify the route to consolidation of information technology systems backoffice operations salespeople39s roles administrative support structures and distribution outlets In this digital age the way these support functions get combined is absolutely crucial to ensuring a smooth easy transition for clients amp8211 who are already due to their own internal complexities starved for greater agility from their agency partners to make all the consumer marketing data that the agencies collect on their client39s behalf something they can use more easily to let consumers know that they are evolving with them on this digital journeyCustomer attrition management is essential Donamp8217t underestimate how tough this can become in a combined company where the potential for inherent conflicts of interest may be considerable amp8211 analyst estimates of the loss of customers in mergers of this size is 710 Setting high retention targets will bring out creativity in the integration design and motivate managers resulting in a service and product approach that meets customers39 perceived value and is delivered through efficient streamlined mechanismsThe net Publicis Omnicom Groupe must take this golden opportunity to redesign rather than integrate Consolidation provides an opportunity to step back and look at both merger partners39 processes infrastructure and business approaches instead of simply migrating potentially inefficient andor outdated processes from one company to another This does not mean the institutions should attempt to take the best practices of both organizations and create the perfect ad company However fixing the parts before forming the whole can be done in such a way as to capture real value for customers and consumers and ergo shareholdersRegardless of the likely challenges of pursuing one a comprehensive redesign amp8211 one that focuses on examining processes infrastructure and the internal approaches that drive each business amp8211 will alleviate operational duplication and create real economies of scale from realigned products and services that ultimately benefit employees customers and the consumer Parts of this post are excerpted from the article entitled amp8220In Busy MampampA Generation Few Deals Brought Value Promisedamp8221 by Jacqueline Corbelli as published in the American Banker October 21 2001 Jacqueline Corbelli is the coFounder Chairman and CEO of BrightLine an advertising and marketing firm which creates and implements interactive TV iTV advertising strategies that engage target consumers in a twoway dialogue with brands such as Unilever GlaxoSmithKline L39Oreal American Express and Kellogg39s Accounting for 95 percent of all iTV activity BrightLine is recognized as the market leader in exploiting the latest digital technologies to create interactive brand experiences for television viewers Jacquie can be reached at jcorbellibrightlinetvCheck us out on Facebook at MediaBizBloggerscomFollow our Twitter updates MediaBizBloggerThe opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of MediaBizBloggerscom management or associated bloggers MediaBizBloggers is an open thought 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Publicis-Omnicom Merger Provides Much Needed Opportunity To 'Step Up'

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Jacqueline Corbelli

You Are Only as Successful as Your Team: Interview with Will Ferguson of Razorfish (Video) - By Jack Myers

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Publicis-Omnicom Merger Provides Much Needed Opportunity To 'Step Up'

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