OMG is buying IPG in a stock transaction, Omnicom confirmed this morning. In a deal first reported by the Wall Street Journal, the merger will create the world’s largest advertising company, surpassing current leaders WPP and Publicis with combined net revenues exceeding US $25 billion. Omnicom’s shareholders will own 60.6% and Interpublic shareholders 39.4% of the new publicly traded company. The transaction is expected to close in the second half of 2025. John Wren will remain chairman & CEO of Omnicom, while Interpublic CEO Philippe Krakowsky will join long-time Omnicom exec Daryl Simm as co-president/COO of the new organization.
Interpublic Group of Companies (IPG) has approximately 24,000 U.S.-based employees working at several media agencies, more on that below, and a wide range of marketing services providers, including Golin, MAGNA, McCann, and Octagon. Omnicom Group has approximately 40,000 employees in the U.S. working at three significant media agencies (see below), creative agencies BBDO, DDB, and TBWA – PR agencies FleishmanHillard, Ketchum, Porter Novelli, The Precision Marketing Group, and many more.
1. OMG Buys IPG: 30% of U.S. Media Buying Power
The above table includes the top 5 media agencies by billings in 2023. OMD, part of OMG, led the pack. The data is from research company Comvergence, which also said that the top 32 agencies accounted for total billings of US $95 billion in 2023. According to the report, the top two ranked media agency holdings were GroupM (WPP) (US $17.2 billion) and Omnicom Media Group (US $16.5 billion). It can be deduced that if, per the above table (Convergence data), OMD 2023 billings were US $9.2 billion, the combined PHD and Hearts & Science billings were US $8 billion. Overall, OMG’s share of the top 32 media agencies’ billing was 17.4%.
IPG revenue, including billable expenses, was US $10.9 billion in 2023, per the company’s financial statements. In 2024, IPG media agencies UM, Initiative, Mediahub, and Kinesso are likely to garner even higher media billings as MediaHub was acquired by IPG in February 2023 and UM won major accounts in 2023 (GEICO, General Mills), which will augment the revenue figure. IPG and OMG will have a share of media billings of the top 32 U.S. media agencies at 29.6%.
A combined OMG-IPG will have a share of U.S. media buys of close to 30%.
2. Accounts/Brands Handled by OMG and IPG Media Agencies
Accounts currently handled in media planning and or buying capacity handled by OMG agencies or IPG Agencies in the U.S. include:
(IPG)
- General Mills
- GEICO
- American Express
(IPG)
- T-Mobile
- LEGO
- AWS, Amazon Business, and Amazon Ads
- Nike
(IPG) - Post Consumer Brands
- Topgolf
- Ulta Beauty
- Chipotle
- Lyft
(OMG) - Amazon (e-commerce platform business)
- PepsiCo
(OMG) - AT&T
- Lovesack
- Hanes Brands
- Virgin Voyages
(OMG) - Volkswagen
- HP
- Diageo
3. Big Tech/Walled Gardens Don’t Make Life Easy for Media Agencies
Meta (IG, Facebook), Google (SEM, YT, DV360, Google Ad Exchange), and Amazon (Amazon Ads, DSP, etc) command approximately 80% of U.S. advertising volume, expected to reach US $400 billion in 2024 (US $1 trillion globally), according to most industry estimates. What’s more, big tech – as the giants Meta, Google, and Amazon are frequently called – capture not only media sales but also sales commissions on both the buyer and seller side because their wealth of data can also be used to target audiences outside of their owned and operated properties. DSPs like Amazon DSP and Google’s DV 360 are used by most digital advertising buyers, and on the sales side, the publishers use SSPs like Google Ad Exchange to monetize their audiences. Amazon, until recently mostly a performance/e-commerce advertising play, has built a comprehensive advertising ecosystem with owned and operated full-funnel solutions, including its DSP and Prime Video AVOD property. In such an environment, to which the trend of brands to in-house media buying has to be added, even large media conglomerates like OMG and IPG have lost relevance. By adding additional accounts (purchasing power) through a merger, OMG and IPG hope to gain more clout. The significant scale of a combined OMG and IPG is intended to strengthen their market presence and bargaining power.
The significant scale of a combined OMG and IPG is intended to strengthen their market presence and bargaining power.
4. OMG Buys IPG: Data, The New Oil
The above-referenced Big Tech companies are also Walled Gardens, which is reflected by the fact that they don’t share substantial data generated by audience interactions. Why would they? First-party data is their critical competitive advantage when offering solutions to advertisers. While IPG owns data unit Acxiom and a few days ago acquired retail media intelligence firm Intelligence Node, and Omnicom in 2023 acquired e-commerce data firm Flywheel, a merger between Omnicom and IPG will enable them to pool resources for substantial investments in data platforms and possibly force the Walled Gardens to share more of their data as a combined OMG and IPG has more power at the media buying negotiation table.
5. AI Puts the Bar Higher
The rise of in-house AI tools provided by third-party vendors or digital platforms is challenging traditional advertising agencies as clients turn to cheaper and faster alternatives.
6. Synergies and Cost Reduction
The OMG-IPG merger is expected to generate operational efficiencies by streamlining overlapping functions and reducing redundancies, leading to cost savings and improved profitability.
