“The ad agency world and the technology world are on a collision course, centered on how well companies manage their business or consumer customer,” writes Forrester Vice President and Practice Leader David Cooperstein in a blog post examining the Publicis-Omnicom merger. “On the client side, the outcomes are likely to be predictable. On the plus side, marketers have been growing their roster of agencies to ensure they have best of breed, and then have to work hard to coordinate these diverse teams. The merger of these two holding companies should provide more diverse choices to work with leading agencies under one holding company umbrella.” 

According to Cooperstein, there are also major — though predictable — negatives, in the name of more client conflicts and less negotiating power on fees. “Once the client conflicts are worked out, multinational marketing purchasing departments will struggle to negotiate if they want the scale and depth of holding company relationships.”

Looking at what is ahead for the sector, David states: “Watch for a range of new agencies to emerge a year from now, as entrepreneurial agency founders decide to take their name on the road to smaller firms or other parts of the industry (of note: Bob Lord’s decision to jump from running Razorfish, DigitasLBi, and Denuo to join AOL earlier this month. Coincidence? I think not.). Also, watch for Havas, Dentsu/Aegis, and IPG to get the stare through deal-hunters’ binoculars as the search for more acquisition focuses on fewer, bigger game.”

Read the full analysis on Forrester’s CMO blog.