Could Publicis Groupe rival Accenture for WPP?

Consolidation is a fact of life in many mature markets as the big gobble up their smaller brethren. Is the global agency market about to consolidate further as the likes of Meta (valuation £1.34 trillion) and Alphabet (Google, £1.67 trillion) increase their online media-based iron grip at the expense of most of the ad holding companies?

There’s clearly no way that even a Publicis that bought WPP would ever rival Alphabet and Meta (or Amazon, which isn’t just an ad company obviously) in size unless disaster struck the tech bro’s. It might of course, such monopolistic businesses do get broken up – as Standard Oil was in 1911 to form the ‘Seven Sisters’ (Exxon, Mobile, Shell etc.)

One reason industries consolidate is to keep out unwelcome intruders. WPP has looked a sitting duck for private equity for the past few years, unable to get all its working parts working profitably, with some strong brands nevertheless. But the creative agencies have been mostly lumped together in VML with just Ogilvy looking more desirable. But Ogilvy itself has been struggling recently with 5% redundancies and, as is the way of such things, doubtless more to follow. And would an Ogilvy even with P/E backing be able to challenge Publicis, Omnicom/IPG and Accenture-backed Song (Accenture is currently worth £137bn.)

WPP’s GroupM media operation (about to be WPP Media) is as close as the British-based holding company has to a jewel in the crown although its recent problems have been well-advertised. Its size may make it attractive to a buyer (like Accenture if it really does want to move into media), its problems less so.

But if you’re sitting where Publicis’ Arthur Sadoun is you may see an opportunity to be clear number one across the entire ad holding company sector, viewing the real competition as Meta and Alphabet on the one hand and Accenture (the whole company) on the other.

Would that count as a monopoly? When you look at the size of Meta, Alphabet and Accenture perhaps not.