Publicis Omnicom
Group: Gap Inc. or Costco?
The announced merger between
Publicis and Omnicom has dominated business publications and social media over
the last few days. Much of the conversation
centers around big, fundamental business issues like regulatory approval and
management of client conflicts. Largely
missing from the conversations are big branding issues, which are arguably as
critical to a successful outcome.
The new organization
brings to market a portfolio of individually valuable brands like BBDO,
Digitas, TBWA\, Razorfish, Leo Burnett, etc, that are each uniquely positioned
in the marketplace, much like Gap Inc.’s Banana Republic, Gap and Old Navy
Brands. But in today’s world more and
more global clients are asking for an integrated holding company model. Thus, in some cases, there will be a need for
the new company to behave more like a big box retail brand, where the agency
brands are no longer directly responsible for client services.
Under this hybrid
distribution model, Publicis Omnicom Group will need to answer a number of
important brand questions like:
- What is the value of the new master brand offering, ‘Publicis-Omnicom Group’ in the marketplace?
- Which brand equities from each holding company should be brought forward, and which may no longer be relevant?
- Should Publicis Omnicom Group ensure that each individual brand maintains its distinct positioning in the marketplace?
- Are there brand positioning redundancies and overlap that will need to be rationalized?
- Should new brands be created that define a new model for the agency of the future?
- As more clients ask for holding company solutions, how does Publicis Omnicom Group prevent the commoditization of their individual brands in the process?
- Is there a role for a ‘private label’ Publicis Omnicom brand, much like Costco’s Kirkland brand?
Thus, rather than just
being a ‘merger of equals’, in which scale is the driver of value, real value
creation may come from a smart, future focused brand portfolio strategy that defines the holding company model of the future.
