If you're in the advertising and marketing ranks, the news this weekend that two of the world's largest marketing providers, Omnicom and Publicis, announced their $35 billion merger was sure to shake you from your Easthampton beach slumber.
We even heard about it all the way down here in the backwoods of Austin, where two members of the respective Omnicon/Publicis combined families, LatinWorks and GSDM, currently hang their hats.
When I first heard the news, all I could wonder was what poor Sir Martin Sorrels, head of the current No. 1 ranked firm, WPP Group, is going to buy now to retake his company's lead.
But for the talk of big advertising and big media, the underlying story here seems to be the changing nature of marketing due to what has come to be called "big-data."
For 100+ years now, the mass-mediated marketing model has largely gone unchallenged, whereby media buyers everywhere look for like-minded audiences by demography, interests, and so forth, and buy media against "thousands" of eyeballs at a time to help an institution best get its message across.
With the advent of bi-directional, interactive digital media (via the Internet and now social media), along with the cable umbilical cord, Google, Facebook, Comcast, and others have challenged those traditional storied notions through the use of more sophisticated, data-driven methodologies (cookie tracking, micro targeted, etc.) that try to reach the "audience of one."
Never mind that I, as an individual, am more than just the aggregate of all my MacBook Air's stored cookies... at least, I hope I am!
John Jannarone of The Wall Street Journal immediately dived into these advertising merger waters, outlining both risks and opportunities: Opportunities to save $500 million due to overlap in research, IT platforms, and, dare I pile on, human resource redundancy (the combined companies would have 135,000 employees worldwide).
The risk? The potential for losing clients due to perceived conflict of interests (Omnicom's client is Pepsi, Publicis's is Coke... can you imagine a newfangled Pepsi challenge where both shops share a roof? "Try the new PepsiCoke!").
From my reading, the merger sends mixed messages. One of the key benefits of working with a larger media buying and advertising conglomerate is enjoying the economies of scale such a firm introduces into the media acquisition equation.
I, Big Co, enjoy the benefit of the purchasing power that all those thousands of other clients Omnicom/Publicis have helps bring to the table.
On the other hand, we're moving into a world where marketing is less about the economies of a thousand scales and more about the small buying opportunity of millions of pieces of big data -- I no longer need to buy a thousand eyes at a time, per se, but instead want to purchase the "right" eyes at the "right" time via the "right" vehicle at micro scale.
Though Publicis has certainly ramped up its investment in the digital realm -- the alleged future of marketing -- Zach Rodgers of AdExchanger points out in a story filed on July 24th of this year that Publicis has had a difficult time holding on to its digital talent.
Most recently, they lost CEOs of Razorfish, Digitas, and Rosetta seemingly to both competition and attrition, while WPP has largely held on to key digital execs garnered through WPP's bits and bytes buying spree.
Nevertheless, Jarrone observes the real advantage may be "pure knowledge," i.e., that Omnicom/Publicis will have "far more data" at its disposal and "be able to purchase advertisements from media owners in a more informed way."
The key question then becomes, are they (or will they be) well-positioned to take advantage of and make effective use of all that big-data, or will they instead be relegated to the more traditional stove-piping of all that valuable information that often permeates big marketing firms?
And even if they are able to go down the road of sharing and utilizing that information effectively, it begins to raise some interesting and pesky privacy concerns.
In this new world, could the TWBA client team on Visa get access to and "leverage" valuable, but perhaps sensitive, marketing data from BBDO's pharmacology client, Bayer?
It's all about synergies, isn't it???
Paula Dwyer, writing for Bloomberg (which just scored its own coup hiring away The Atlantic's digital guru, Justin Smith, to become CEO of Bloomberg's media group), suggests Google may be "the biggest digital winner of all."
As she points out, the top five ad agencies would have to merge before their annual sales added up to Google's 2012 revenue of $50 billion.
In other words, the big ad players can merge until their hearts' content, but increasingly, advertisers and marketers, large and small, are placing their large and small bets on the big venues with the biggest data -- the Facebooks and Googles of the world.
It's enough to drive Don Draper completely mad!