Omnicom is devouring IPG, Publicis might devour parts of Dentsu. WPP is weak too, says Sir Martin Sorrell
Storyboard18 at Davos: In conversation with Moneycontrol's Chandra Srikanth at the WEF 2025 in Davos, Sir Martin Sorrell, Founder, and Executive Chairman, S4 Capital, points out how Publicis and Omnicom are set to devour the 'weak' agencies— Dentsu, WPP, IPG, and Havas, going forward.
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As the wave of consolidation hits the advertising industry hard, Sir Martin Sorrell has spoken. He calls this phenomenon 'the strong devouring the weak', which according to him will continue— with eventually only two (Publicis and Omnicom) advertising giants withstanding the wave.
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Following Omnicom's (proposed) acquisition of IPG, French advertising giant, Publicis Groupe, recently announced merging two of its most prominent agencies — Leo Burnett and Publicis Worldwide into 'Leo'.
Speaking with Moneycontrol's Chandra Srikanth on the sidelines of the World Economic Forum 2025 in Davos, Sorrell shared his insights on how the mergers will shape the advertising landscape.
"This is a reflection of the strong; there are two very strong companies and four weaker companies. The two strong holding companies are Publicis and Omnicom. Omnicom is devouring IPG. Publicis might devour parts of Dentsu, which is one of the weak ones. WPP also is one of the weak ones...I think probably the six will go to five, and five could go to four, and four could go to three."
Sorrell added, "I think you could end up with Omnicom and Publicis as two of them, and maybe Havas and Dentsu get together. Havas now is separate and its market value looks cheap from the outside, it's not been as strong as people forecasted when they did the restructuring and splitting up of Vivendi."
Sorrell also shared his thoughts on Omnicom's proposed acquisition of IPG.
"The Omnicom share price has come off by about 17%. Shareholders are a bit bemused by it obviously. Maybe they'll go through, but it's going to result in a lot of redundancies; the number of people will go from 127,500 to about 110,000. So, you'll see synergies at least double to what they're saying they will achieve."
"...IPG sold on weakness, as it lost Coke, General Motors, Amazon, Pfizer, and J&J. IPG has lost over $1.5 billion worth of revenue in the last 3 or 4 years... strong will consume the weak. "
According to Sorrell, there exists a strong argument that the Japanese are suffering outside Japan with Dentsu.
He predicts, "A merger between Havas and Dentsu International would make sense... And maybe Publicis can pick up some pieces of WPP as that's dismembered, which I think in the fullness of time it probably will be."
WPP is in an extremely weak position, according to him. Bain Capital has already announced the sale of Kantar Media to H.I.G. Capital, a private equity company, for a billion, which flows through to Kantar and strengthens Kantar's balance sheet.
Bullish on the Indian Advertising Industry
As the industry’s top players navigate through the pathways of consolidation, AI, and global uncertainty, Sorrell remains bullish on the Indian market.
"The Indian advertising market is very vibrant and it is still actually dominated by traditional media, not as untraditional as digital. The world is about 70% digital now and it's about $1 trillion of ad spend in the world. The traditional piece is declining-- going down by about 4% to 5%. Digital continues to grow at 10%-15%."
Streamers like Netflix have caught on to the strength of and importance of sports like the IPL, which India twigged a long time ago, he highlighted.
"... I'm very bullish not only on India but the Indian advertising market too. And the two work in tandem. If corporate profits are strong, which they are in India, advertising is strong. That's probably the tightest correlation that exists."
Sorrell added, "Indians are very strong technologically, and therefore they've woken up to the importance of digital communication. They'll wake up even more to it in the future."
Adding more on S4 Capital's plans for India, he mentioned the company's existing small operation in New Delhi and is very keen to expand it further.
He recently told the media that S4 Capital is not trying to be a holding company – but is a unitary model.
On Artificial Intelligence
Sorrell, who has witnessed some of the most seismic shifts in the advertising industry, believes in the power of artificial intelligence (AI).
"I use Gemini. Recently, it helped me instantly write a buy circular and a sell circular on S4... literally in 10s. It is amazing."
According to him, AI is changing the speed with which we get advertising to market super quickly now; personalising at a scale we never thought possible; and media planning, buying and general efficiency, while also democratising knowledge inside companies.
