How the Omnicom and IPG Merger Could Reshape TV Advertising

Upon the news that Omnicom is acquiring rival agency holding company Interpublic Group, marketers and brands are wondering how the potential merger could impact the TV marketplace.

Ross Benes, a senior analyst with eMarketer, said if the deal goes through without any significant delays or divestment requirements, it could add more scale to the connected TV (CTV) landscape. For instance, Omnicom’s partnership with The Trade Desk around CTV could be extended to IPG’s agencies.

Though the company will likely go through consolidation, with some agencies likely being cut from the portfolio, the size of the combined company could be formidable in the CTV marketplace, Benes noted.

“It’s possible that the huge size of the combined companies post-deal will lead to the holding company being able to negotiate better CTV ad rates for its clients,” Benes told ADWEEK. “No streamer could avoid doing business with a combined Omnicom and IPG.”

Andrew Lipsman, an independent analyst and consultant, said the industry is in the early days of growth in two major retail media-driven markets—performance TV and in-store retail media—and it pays to have leverage.

“Those are nascent right now, but this is where large budgets are going to go,” Lipsman said. “The upfront process will be part of the buying process, and that negotiating leverage for pricing power is key.”

An industry source with knowledge of TV ad sales added that the combined company will likely pitch its scale as a pricing benefit.

“They just have more scale to negotiate with,” the source said. “Arguably, that could help them a little bit during the upfronts.”

Scale isn’t everything

Combined, Omnicom and IPG represent $71 billion in media billings, nearly 32% of the global market, according to COMvergence.

Still, the TV ad sales source said scale doesn’t necessarily result in lower prices, and Benes added that he’s skeptical of overall pricing power.

“Previous consolidation in this industry hasn’t benefited clients or won them discounts they couldn’t obtain otherwise,” Benes said. “The largest brands in the portfolio may benefit from bulk pricing power, but smaller brands in the portfolio will have more trouble getting better rates just because their agency went through a takeover.”