The road ahead for advertising’s new big two – Publicis and Omnicom – in 2025

Arthur Sadoun, chairman and CEO, said: “Thanks to a very strong Q4, Publicis became the largest advertising company in the world in 2024.

“We are ending the year in the number one position across the board, growing three times faster than our holding company peers, and five times faster than the IT consultancies. We delivered industry-high financial ratios while stepping up the pace of our investments in AI and talent. Once again, we topped the charts in new business rankings.

“But even more importantly, we are accelerating on our status as a Category of One thanks to our unmatched 1st-party data capabilities, our connected media ecosystem, our creative firepower, and our 25,000 engineers, brought together through the Power of One. This makes us confident in significantly outperforming the industry in 2025 for the sixth year in a row.”

The key numbers for the year to December 31, 2024: net revenue of €14bn, 5.8% organic net revenue growth, with operating profit of $2.5bn at a margin of 18%. That margin is impressive. Very impressive in fact, given its sheer scale, levels of infrastructure, the investments it’s making in its people, data, AI, technology, the list goes on. So, for those young, fleet-of-foot, dynamic independents out there an 18% margin must be a walk in the park to achieve – are you?

Sadoun went on to set out what he sees as the unique competitive advantages that have put Publicis in the “number one” spot:

• “Leadership in first-party and proprietary data”
• “Thanks to AI we connect this data to our entire media ecosystem and intelligent creativity”
• “We have 25,000 engineers and consultants … to make sure our clients can integrate those capabilities into their own environments and transform their business model”
• “We operate as an efficient and flexible single platform organization thanks to the Power of One, Marcel and our Country Model to make all of this data and technology seamlessly accessible to all off our clients and teams”

A pretty powerful framework. if you head up to 30,000 feet, what is your equivalent articulation of your competitive advantage(s)?

Part of what has driven Publicis, for decades now, has been chasing down the biggest in the pack – WPP. Having an enemy, a Goliath to your David, is very commonly what drives people, drives businesses. This has been the environment that Publicis has been playing within, evolving, looking for new angles, markets, advantages. Now it is the Goliath, or perhaps it’s Leo the Lion.

So what’s the goal now? Well, assuming that regulatory hurdles don’t trip up the Omnicom takeover of Interpublic, Publicis shifts back to number two (in terms of revenues). Sadoun is already relishing the hunt for the new Goliath – “this puts Publicis back into the challenger position, which is where we like to be.”

But he’s not rushing around trying to find a big lump to quickly fatten the numbers. Instead, Publicis is pointing to its €800m to €900m acquisition budget for ‘bolt ons’. This means buying strategically to enhance what it already has, to bolt things on to existing operations in some very specific areas: first-party data, production, digital media, technology – quite a spectrum.

And Sadoun isn’t about to put a banana skin in front of himself at the start of the year – his outlook is for 4% to 5% organic net revenue growth, which is slightly down on 2024. I’d bet on Publicis beating this range, but this old adage still works – under-promise, over-deliver!

Later the same day Omnicom’s results landed. It also had a strong year with $15.7bn of revenues, with organic growth of 5.2% over 2023 (the Publicis numbers above were on net revenue, so not quite apples and apples), and an EBITA margin of 15.5% (again not quite a comparison to Publicis – EBITA v operating margin). And the guidance for 2025 sounded familiar at 3.5% to 4.5% organic growth – under-promise, over-deliver.

John Wren, chairman and CEO, said: “From this position of strength, we are incredibly well prepared for and excited about the complementary combination of businesses and cultures with our proposed acquisition of Interpublic. Together, clients and employees will benefit from expanded products to deliver superior creativity, innovation and effectiveness. We will also bring together unparalleled data assets to market, fueling leading creative, produced at scale, and activated by the world’s top-ranked media practice to drive measurable sales. We see significant upside potential through expected revenue and cost synergies that can drive growth beyond what Omnicom was delivering alone.”

There were winners and losers across the different service lines and also by geography, but for me there were more interesting things that emerged.

During the results webcast, Wren unsurprisingly spent most of his time on the Interpublic takeover, a big part of which was around the $750m of annual cost synergies that it is expecting to achieve if the deal goes through. And he sees more synergies on top of these through revenue opportunities, leveraging near and offshore capabilities and utilizing automation, including AI.

Wren was keen to make clear that headcount savings “will not impact employees dedicated to servicing our clients and generating revenues.” I can imagine quite a few people trying to work out whether they fit into this definition…

And where there is duplication or for people who aren’t ‘dedicated to servicing our clients and generating revenues,’ they will choose “the best individuals across the organization, irrespective of their current affiliation.”

the biggest challenges in the coming months. Shareholder approval is set for March 18, but the deal won’t close until the second half of 2025. Until then, Wren said that they will “continue to operate as independent businesses.”

This is one hell of a lot of internal work, spreadsheets, integration planning, legal loopholes to crack. All while Publicis is practicing with its sling to take aim at the coming Goliath.