Gideon Spanier
May 10, 2017

Consulting or IT giant to buy big six ad group 'within next five years'

WPP, Omnicom, Publicis Groupe, Interpublic, Dentsu and Havas are merely "minnows", according to an M&A advisor.

Consulting or IT giant to buy big six ad group 'within next five years'

One or more of the "big six" advertising groups will be bought by a consulting or IT giant "within the next five years", a leading M&A adviser has forecast.

Ben Tolley, a partner at Clarity, which advised independent Australian creative agency The Monkeys and sister design shop Maud on their sale to Accenture Interactive this week, said he expects consulting and IT firms to make bigger acquisitions in marketing services.

"It’s a case of when, not if," Tolley, a Briton who is now based in Australia, said. "Look at the scale of the global systems integrators and IT firms compared to the relative size of the ‘big six’ minnows."

Accenture has double the staff of WPP, the world’s biggest ad group, and a stock market capitalisation that is more than twice the size.

The other "big six" firms are Omnicom, Publicis Groupe, Interpublic, Dentsu and Havas.

"One or more of the "big six" firms will be owned by one of those systems integrators or IT firms within five years," Tolley said.

Tolley declined to comment on the sale of The Monkeys and Maud.

"There’s a certain amount of wishful thinking on the part of the marketing services firms about there being a culture clash between the consultancies and system integrators and software companies on the one hand and creative businesses on the other," he said. "The reality is what those firms [in consulting and IT] are doing in marketing services is [already] very similar," he said, pointing to areas such as service design which is "inherently creative".

Consultants including Accenture, Deloitte and EY and IT companies including IBM and Salesforce have made a growing number of relatively small acquisitions of marketing agencies around the world in the last couple of years.

"The marketing services groups are waking up to the fact that these deals are going on apace—and it’s not just in America and Europe and Australia," Tolley said, explaining why a bigger deal could be on the cards.

"There aren’t just tanks parked on the lawn of the marketing services groups," he said. "The tanks are poking through the letterbox."

Everything that marketing services groups do is "up for grabs", he added, noting that media-buying was the only significant area where new entrants have not yet made acquisitions.

Tolley suggested even media could change because of the growing dominance of Google and Facebook, which could "lessen the arbitrage role" that agencies have traditionally had in areas such as TV, outdoor and press.

Source:
Campaign UK

Related Articles

Just Published

2 hours ago

Campaign Crash Course: Leadership lessons for ...

How do leaders create effective teams? Dentsu Aegis Network Greater North chief Cheuk Chiang explains how to foster better talent by applying leadership principles, tips and learnings from past mistakes. Watch his video and test your knowledge with a quiz.

2 hours ago

The most beautiful pizzas you will ever see

INSPIRATION STATION: How a pizzeria in Vietnam teamed up with boutique agency Ki Saigon to create beautifully inspiring (and edible) tributes to world peace.

3 hours ago

Lenovo eschews high-voltage celeb endorsements for ...

Consumer electronics brand embraces functionality over bells and whistles as it seeks to stand out in competitive market in a campaign by SuperHeroes.

5 hours ago

How remote pitching is showing up the agency showmen

With the pandemic stalling the traditional pitch process and the rise of the remote or virtual pitch, what is known is showmanship is no longer winning the day.