The world of advertising and public relations has long been dominated by a small group of marketing services. Each group earns billions of pounds annually.
Some high-profile stories over the last few weeks remind us of how big and powerful these companies have become. At times, it appears to be expanding at a rate that ignores responsible corporate controls. The two biggest companies, WPP and the well-named Omnicom, both appeared in the headlines last week for quite different reasons.
Omnicom, headquartered in the United States, was able to acquire a global advertising, marketing, public relations and media purchasing account for Mercedes-Benz. Omnicom has acquired this prestigious and lucrative account and in the process acquired two German marketing agencies already working for automakers to fight European rival Publicis.
Earlier this month, UK-based WPP made equally bold moves in the corporate and financial arena. Co-owned agency Finsbury Glover Hering is bidding on New York-based consultancy Sard Verbinnen, a US leader in mergers, acquisitions and activities.
If transactions go through an integrated agency, they will become global leaders in financial telecommunications consultants and are another example of how integration and these marketing service giants can help.
But perhaps as a timely warning, WPP has been fined $ 19 million by the US Securities and Exchange Commission (SEC) for bringing bribes and other illegal schemes due to its failure to properly supervise its overseas subsidiaries. It became clear that he was fined.
For example, an Indian subsidiary could have paid a $ 1 million bribe to a civil servant through an intermediary to win a government business.
What that means is that the global acquisition of WPP under founder and former CEO Martin Sorrell is at high risk of corruption and advertises in markets with great financial incentives for founders to reach their business goals. It was to buy an agency.
“Companies cannot be allowed to focus on profitability or market share at the expense of proper management,” Charles Cain, head of the SEC’s FCPA division, warned in a statement. bottom.
It doesn’t necessarily mean that marketing service giants behave this way, but the story of more “ethical” and “purposeful” companies in these groups.