Madison and Wall’s Brian Wieser Discusses Pros & Cons of a Merged Omnicom-IPG and the 2025 Industry Outlook…
Brian Wieser is one of the few people who can outline a career with such roles as investment banker, equity research analyst, long-time agency executive, and developer of two of the global advertising industry’s most widely relied upon data sets. His firm, Madison and Wall, operates at the intersection of how trends in media spending and advertising budgets affect marketers and investors.
He’s an ideal person to discuss the pros and cons of the announced Omnicom—Interpublic (IPG) merger, as well as the industry outlook for 2025.
“If Omnicom does acquire Interpublic,” says Wieser, “the combination would produce what would easily be the world’s largest agency services company with $24 billion in reported revenue and probably closer to $22 billion in net revenue, excluding undisclosed media costs at Omnicom.”
Brian Wieser explains that Omnicom’s accounting for revenue differs from the choices made by other agency groups, making comparisons imprecise.
For comparison purposes, WPP’s net revenues were $15 billion last year and Publicis’ were $14 billion.
PROS & CONS
“There is tremendous industrial logic to two large agency groups combining,” says Wieser.
With increased scale, an agency group would be better positioned to invest against people, partnerships, and technological capabilities. He adds, “Especially in a world where AI and scaled investments are now required to best service large brands.”
There are also efficiencies to be realized in real estate costs, back-office costs, and leadership team costs- as a start.
Brian Wieser also sees benefits regarding principal-based media trading. “More scale,” he states, “will provide a holding company with more information about media pricing and presumably better position that holding company to make financial commitments to media owners.”
Plus, he says, “the removal of one significant globally-capable agency group would actually improve competitive dynamics in favor of all agencies when large clients seek to play agencies against each other in order to drive pricing for services down.”
Yet, there are also potential risks and disadvantages.
The process of simplifying a larger company is incredibly disruptive to the people who work at the agencies experiencing the merger. Competitors will often take advantage of such disruption, and clients may be more likely to choose to work with other agency groups in the near term.
Greater scale can lead to what Wieser calls “dis-synergies,” particularly if corporate politics and cultural challenges negatively impact the company’s ability to pursue its goals.
“An equally interesting knock-on effect,” says Wieser, “of any tie-up with Omnicom and Interpublic would relate to the question of what happens to other holding companies, and whether or not they would pursue scaled combinations themselves.”
“While it’s too soon to say whether or not a transaction like this would ultimately come together, it’s likely that even if it does not, significant corporate activity for the largest agency groups feels increasingly inevitable.”
PAST AS PRELUDE
Brian Wieser believes that antitrust issues would not be significant in the potential Omnicom-IPG merger. He adds, “They weren’t in 2013 when Publicis and Omnicom attempted to combine, and it’s not likely that the incoming US administration seems likely to be more restrictive on agency M&A. Moreover, in the present era, agencies are much smaller proportionately as large agencies have collectively lost share to smaller ones in the United States over that time largely as they pruned their portfolios.”
For reference, he outlines that in 2013, the five biggest agency holding companies had 37% of all agency services revenues. In 2023 that figure was 30%. More specifically, in the US, it is estimated that a combined Omnicom-IPG would have around $12 billion in net revenue (excluding media pass-through costs), or around 13% of all US agency services revenues. (This would be significantly larger than either Publicis or WPP, with approximately $8 billion and $5 billion in net revenue in the US, respectively.)
Interestingly, a combined entity would also likely become the #1 agency group in the UK, with around $2.4 billion in revenue, compared to WPP’s $2.1 billion. The same holds true for the rest of Europe, although WPP remains the largest agency group in APAC and Latin America.
To learn more from Brian Wieser about the pros and cons of an Omnicom-IPG Mega-Merger and the 2025 Industry Outlook, watch the video interview on Internationalist Marketing TV (IMTV) on YouTube by CLICKING HERE.
In our conversation, we discuss the following:
- Let’s start with the merger… particularly as someone who is at the intersection of Madison Ave and Wall Street. You always offer a balanced view, so what are the pros and cons?
- Everyone seems to be asking, “Is bigger is better?” What do you say?
- If this mega-merger is approved, does this change the agency business? Or the media business?
- Are agencies at an inflection point regarding their services and how they earn their revenue?
- You talk about uncertainty in 2025… outline what you mean. What issues will impact the overall advertising market—positively and negatively?
- Last year, you talked about China and Vietnam as substantial investors in US advertising. Do you see that continuing? Any other players?
- What about Commerce media or Retail media? Are there new pressures in 2025?
- What is the figure you estimate for total media spending in 2025?
- Looking back… did anything surprise you in 2024? For example, what is the amount spent on political advertising?
- Finally, for 2025, is there ONE WORD (or phrase) that you believe will characterize the coming year?
Listen to Brian Wieser discuss the pros and cons of an Omnicom-IPG Mega-Merger and the 2025 Outlook and to The Internationalist’s entire Trendsetters podcast series here on iHeartRadio’s Spreaker or wherever you download your podcasts.
2025 Forecast: Uncertainty and Positive Growth?
“Uncertainty” is the word that first comes to mind when Brian Wieser talks about 2025. Although his firm recently lowered its 2025 forecast to 4.5% growth from 5.3% previously (excluding political advertising), he sees some negative assumptions entering into 2025. However, he also admits there is still a positive outlook for advertising in the United States going into 2025 relative to 2024.
Some of the issues that could be positive for advertising are deregulation within specific industries, lower interest rates, and higher inflation.
Those factors that may be considered negative for advertising include restrictions on advertising spending from specific industries (such as the pharmaceutical sector), reduced M&A restrictions, and potential higher tariffs.
Some of the issues that could be positive for advertising are deregulation within specific industries, lower interest rates, and higher inflation.
Those factors that may be considered negative for advertising include restrictions on advertising spending from specific industries (such as the pharmaceutical sector), reduced M&A restrictions, and potential higher tariffs.
About Brian Wieser, CFA, CEO and Principal
Brian Wieser, at heart, is an analyst. But not an “industry analyst” nor purely a “financial analyst.” He’s more strategically oriented than most people who have worked on Wall Street and more conscious of capital markets issues and investor thinking than most who focus on strategy.
His background includes extensive experience in both industries. Brian was a banker at Lehman Brothers (covering the media and telecom industries) and services businesses). He also worked as a senior executive at two of the world’s four largest advertising agency groups, Interpublic and WPP. In addition, Brian Wieser was CMO for Simulmedia, a leading provider of advanced TV solutions.
