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Blog Post By Harriet Gordon

Death of the agency?

Advertising is the bread and butter of the graphic arts industries. So I’m sure many companies will have taken note of the recent merger between the two advertising giants Omnicom and the French Publicis Group.

The birth of Publicis Omnicom was toasted over champagne in Paris on July 28th, and for good reason — with combined 2012 revenues of $23 billion and a market value of $35 billion, the firm overtakes British-based WPP as the word’s largest advertising and marketing agency. It will now be responsible for about 20 percent of advertising spending worldwide.

Yet this merger hasn’t happened for no reason. In these days of analytical services fighting over who gets to advise clients on where best to place ads, advertising agencies are finding it increasingly difficult to win work. The two firms predict the merger will help them cut costs by around $500 million a year, reflecting their need to streamline cash-flow — a far cry from the liquid lunches of the 60s!

This, however, may be good news for print companies. With an investment in some analytical software proving the power of print advertising, they could take on the role that used be played by the agencies, and advise their clients themselves on the best options available. Additionally, with the design skills prevalent in the industry, companies may move to offer the service of creating or helping with campaigns, again reducing the need for an agency. The cost that is saved from cutting out the middle-man can then be passed down, as marketers have a larger budget to spend on print.

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