The advertising industry is undergoing a seismic shift. The announcement of a proposed $13.25 billion merger between Omnicom and Interpublic Group (IPG) marks the latest development in an industry increasingly dominated by consolidation, Big Tech, and artificial intelligence (AI). By 2023, the top 5 advertising holding companies already controlled approximately 46% of global advertising spend, according to RECMA data. As WPP CEO Mark Read noted in 2023: "Scale and technological capability are becoming increasingly critical in our industry."

The Impact on Publishers: The Good, the Bad, and the Potentially UglyThe Good: Bigger Budgets, Better Deals

Historical data supports the potential benefits of agency consolidation for publishers. After the 2013 Publicis-Omnicom merger attempt, GroupM Chief Investment Officer Bharad Ramesh observed: "Consolidated buying power has historically led to premium inventory access and better pricing for top-tier publishers." According to IAB's 2023 report, programmatic advertising grew to represent 72% of all digital display spending, highlighting the increasing importance of data-driven buying.

The ad-tech landscape has become increasingly dependent on data and AI integration. By 2023, Gartner reported that 63% of marketing leaders were already using AI/ML for advertising optimization. According to McKinsey's 2023 State of AI report, companies using AI in marketing and sales reported revenue increases of 10-20% on average.

The Bad: The Risk of Price Pressure

While larger ad deals might seem advantageous, historical precedent shows that consolidated agencies often exercise their increased buying power to drive down prices. The efficiencies gained through AI and automation can lead to inventory oversupply, potentially reducing CPMs. According to a 2023 Digiday survey, 67% of publishers reported experiencing downward pricing pressure from large agency consolidation.

The Ugly: Job Cuts and Disruption

Previous industry consolidations provide insight into potential workforce impacts. The 2019 FIS-Worldpay merger resulted in approximately 2,600 job cuts (about 5% of their combined workforce) according to SEC filings. Harvard Business Review's 2023 analysis found that marketing industry mergers typically resulted in 7-12% workforce reduction within the first year.

How to Win as a Publisher in This New Era

Embrace Data and AI

According to Deloitte's 2023 Digital Media Trends survey, publishers who invested in first-party data capabilities saw an average 43% increase in advertising yield. The Interactive Advertising Bureau reported in early 2024 that publishers with advanced data capabilities commanded CPMs 3.6 times higher than those without.

Focus on Video and Emerging Formats

eMarketer's 2023 data showed digital video ad spending reached $63 billion in the US alone, with a compound annual growth rate of 15.7% from 2019-2023. YouTube CEO Neal Mohan stated in late 2023: "Video advertising is no longer just an add-on - it's becoming the core of digital advertising strategies." 

Strengthen Direct Relationships with Advertisers

A 2023 Advertiser Perceptions study found that 58% of advertisers were increasing their direct dealings with publishers, citing better data access and more transparent pricing as key motivators.

Future-Proofing Against Negative Impact

Publishers must diversify revenue streams while investing in technology. A 2023 Reuters Institute study found that publishers with three or more significant revenue streams showed 23% higher profit margins than those relying primarily on advertising alone. My recommendation is leveraging more video products such as social branded content, and video commerce to support affiliate revenue as much as possible, currently, it may account for about 30% of publisher revenue but with recent platforms like TikTok Shop enabling affiliate publishers 

How to Lose: Ignoring Technology and Relying on Old Models

According to PwC's 2023 Media Outlook, publishers still relying primarily on traditional advertising models saw revenue decline by an average of 12% year-over-year, while digitally transformed publishers grew by 15%. Video advertising evolving and publishers need to innovate their video ad offering beyond outstream video.

Looking Ahead

While the specific outcomes of the proposed Omnicom-IPG merger remain to be seen, historical data suggests that industry consolidation will continue to reshape the publishing landscape. Success will likely depend on publishers' ability to adapt to technological change while maintaining strong direct relationships with advertisers.