What the Omnicom-Publicis merger could mean for Canada: report

The RECMA Overall Activity Rankings shed light on which agencies held the largest market share last year; and DDB's Frank Palmer weighs in on the merger.

With the smoke still clearing from this week’s blockbuster announcement that Omnicom will merge with Publicis to form the Publicis Omnicom Group, Research Company Evaluating the Media Agency Industry (RECMA) has released its global “Overall Activity Rankings 2012″ report, which sheds some insight on what the merger could mean for the Canadian mediascape.

According to the report, Omnicom’s OMD held the largest market share in the Canadian industry in 2012 at 12.1%, and had overall activity worth about $988 million. Tied for second are Publicis’ ZenithOptimedia and GroupM’s MediaCom, which both held 11.5% of the market share. ZenithOptimedia had the slight edge in overall activity, however, with about $938 million compared to MediaCom’s $935 million.

In fifth spot, Omnicom’s PHD held a 7% market share in 2012, with overall activity of $569 million. Meanwhile, Publicis’ Starcom and MediaVest came in at the 12th and 13th spots. In 2012, Starcom held a 4.1% marketshare and saw overall activity worth $333 million, while MediaVest claimed 3.5% of the market with overall activity worth $288 million. (See chart below.)

Based on these findings, a combined Omnicom and Publicis would have held 38.2% of the Canadian market share, with their agencies’ overall activity valued at about $3.12 billion. Its next closest competitor would have been GroupM, whose agencies held a combined 26.1% market share, with overall activity worth $2.12 billion, according to the report.

Meanwhile, the industry continues to weigh in on the Publicis Omnicom merger. CEO and chairman of Omnicom’s DDB Canada, Frank Palmer, said in a statement that the industry shouldn’t be so surprised by the news, given that mergers, like those between airlines, department stores or major telcos, are a shaping force for all industries in today’s business world.

“All mergers are made with good reasons. Growth stimulation is one. Offering our valued clients better media efficiencies is another,” he said. “Today all of our clients demand the best in class and at a price that’s competitive. The combined resources of Publicis and Omnicom will create more synergies, cost savings and a larger talent pool of professionals that will be difficult to duplicate.”

While reaction to the mammoth announcement has been mixed to date, Palmer is bullish about the positive outlook for the Publicis Omnicom Group.

“Just like sports, in business you need the very best talent in order to win. Our game has just got much better,” he said. “At this early date, I feel that it’s an exciting time to be in the business of advertising and marketing if you are working for and with Omnicom and Publicis.”