Today Publicis and Omnicom, two of the “big five” global advertising and marketing agencies, announced a “merger of equals”, in which the two will combine to create the world’s biggest agency, with some $22.7 billion in annual revenues and a market capitalization of $35.1 billion. The pair say that the new Publicis Omnicom Group initially will be jointly run by the two existing CEOs, John Wren from Omnicom and Maurice Levy from Publicis, and headquartered both in New York and Paris, with a holding company HQ in the Netherlands.
The companies will trade publicly as ONC (currently Omnicom’s symbol) on both the NYSE and Euronext.
The confirmation – after reports of the deal swirled earlier this week – was delivered today in a press conference on a hot Sunday summer afternoon in Paris – a slightly oxymoronic setting for a megadeal.
“For many years, we have had great respect for one another as well as for the companies we each lead. This respect has grown in the past few months as we have worked to make this combination a reality. We look forward to co-leading the combined company and are excited about what our people can achieve together for our clients and our shareholders,” the co-CEOs said together.
If Google is the world’s biggest digital advertising network, the merger of these two will create an advertising megacorp that will be the world’s biggest provider of advertising to feed that machine. It will be twice the size of its nearest rival, WPP. While there are two other agencies in addition to these, Interpublic and Havas, they are significantly smaller. This will lead, inevitably, to antitrust scrutinty from regulators. Today, the companies, both already global operators, noted that they will need regulatory approval in 41-46 countries.
“We are not expecting anything that would prevent us from going forward,” Wren said at the press conference (according to Reuters). “We are confident that we will get regulatory approvals,” Levy also noted.
It may also spur more merger activities among other players.
Without a doubt, the history of the ad industry has been one of ongoing consolidation, and in that regard this seems like a logical and inevitable step. Some of the agencies that were once rivals and will now coexist under one owner will include BBDO, Saatchi & Saatchi, DDB, Leo Burnett, Razorfish, Publicis Worldwide, Fleishman-Hillard, DigitasLBi, Ketchum, StarcomMediaVest, OMD, BBH, Interbrand and ZenithOptimedia, with clients covering some of the world’s biggest buyers of advertising, including mobile carriers like Verizon and AT&T, drinks companies like Coca-Cola, financial services companies like Visa, and many more. The companies say they will have “efficiences” of $500 million as a result of the deal; whether that will lead to layoffs or closures has yet to be announced.
But while this plays to type in some regards, the world of advertising and marketing is also up against growth of other disruptive forces, for example the change in consumer habits brought about by the internet. That has taken the rug out from some of the more traditional formats for advertising, such as print media, and pushed more spend towards digital formats like the internet and mobile advertising.
These are still relatively smaller players in the wider advertising ecosystem: worldwide there will be about $519 billion spent in marketing and advertising this year across all mediums. But if you break out a newer area like mobile advertising, it’s expected to be just under $9 billion this year globally, according to the IAB.
Still, the smart money sees the writing on the wall. TV advertising dominates today, Nielsen noted earlier this week, but it has grown by just 3.5% so far this year while Internet has gone up by 26.3%. The IAB estimated that mobile will go up by 83% this year.
Publicis and Omnicom’s rival WPP projects that by 2018, 40% of ad spend that it oversees will come from digital. That is driving a number of acquisitions and investments, but it is also fuelling the rise of a new kind of advertising company focused around advertising technology (ad tech) to better measure, leverage and distribute ads in these new mediums. The rise of digital media is also dovetailing with the growth of advertising and digital opportunities in emerging markets like China, South America, India and so on.
All of this plays strongly into the technology and startup ecosystem, both in terms of the companies that are growing up around these innovations, but also because such a large part of the tech world is built around the consumer internet, and much of the consumer internet is built on free, ad-based models. Consolidation of players like Omnicom and Publicis speaks to a growing desire to better scale and consolidate on the kinds of returns at can be made from newer platforms like the internet.
The first mobile devices running Firefox OS are out in the market. It’s too early to say how well Mozilla’s fledgling open web HTML5 mobile platform is doing in its bid to steer budget buyers away from Android gateway devices. Which is, make no mistake, exactly the hope of the carriers throwing their weight and influence behind this alternative open platform.
A raft of carriers signed up to support Firefox OS at its launch announcement back in February. According to Mozilla 17 carriers are currently committed to distributing devices (namely: Am rica M vil, China Unicom, Deutsche Telekom, Etisalat, Hutchison Three Group, KDDI, KT, MegaFon, Qtel, SingTel, Smart, Sprint, Telecom Italia Group, Telef nica, Telenor, TMN and VimpelCom). So far only a handful of devices have gone on sale, including the ZTE Open and Alcatel One Touch. More are apparently due to be announced this year.
It is, to reiterate, the very beginning of the Firefox OS project. Telef nica started selling the first consumer handset running FFOS in Spain at the start of this month – the $90 ZTE Open. It says it won’t be breaking out sales for individual models but asked about early sales indications, a spokesman said: “The team is very happy with how it’s going in Spain.”
But it’s not just carriers putting FFOS phones in the market. Being an open platform there is scope for smaller players to get involved, such as hardware startup Geeksphone, which put out two Firefox developer preview devices (called Keon and Peak) back in April, selling out within hours. Geeksphone has now followed those up by announcing its first consumer-focused device, called the Peak+.
The Peak+ is $196 (excluding taxes) on pre-order, with a slightly higher price tag planned when it goes on sale in September. “Firefox developer preview is no longer where we want to be. We are evolving towards a consumer market,” Geeksphone CEO Javier Ag era tells TechCrunch. “Geeksphone has always been selling to any customers and users since its foundation four years and a half ago… [Initially] we went for the developer preview branding because we wanted to target those early adopters, those early users who were building up the ecosystem, and we felt that was a natural thing to do.
“Now we’re evolving to a more consumer-oriented perspective – back to our origins. We will keep of course a developer-friendly brand, with some unique characteristics, but target everybody.”
So far, so good – for Firefox OS and for the diversity of the mobile ecosystem. Even Android fans can probably get behind the idea that another open mobile platform offering choice is A Good Thing. Some may even concede that challenging Google’s ability to dominate and control the mobile ecosystem may be ultimately beneficial, too (assuming Firefox OS can build momentum, of course). Diversity can foster innovation, after all.
But it’s not all good. Mozilla is not universally liked in the open-source space. Quite the opposite. The organisation has a reputation for “viciously defending its brand,” as MeeGo startup Jolla’s Marc Dillon put it in thinly veiled comments earlier this year at the Mobile World Congress tradeshow – where Firefox OS was being very publicly endorsed by carrier club, the GSMA. Dillon shared the stage with Mozilla’s Mitchell Baker and Canonical’s Mark Shuttleworth in a panel discussion about open platforms, and the underlying tensions between the smaller players and the grand old dinosaur of open were palpable.
Mozilla has a reputation for being slow, lumbering and having teeth. Much like its dinosaur logo. You could describe it as the Microsoft of the open-source movement. Which doesn’t sound like the kind of Android-challenging champion the mobile world needs right now. And yet Mozilla’s corporate attitude and approach have clearly made a lot of (equally conservative) carriers comfortable about working with it – which is perhaps the only way Android can be challenged at this point, being as it owns circa 70 percent of the global smartphone market.
Here’s the latest example of Mozilla’s corporate ethos in action. Last week the organisation contacted publications (including TechCrunch) that had reported on Geeksphone’s new “Firefox OS” Peak+ device to request a “correction.” Mozilla’s email said the Peak+ is not “Firefox OS certified” so cannot be described as a Firefox OS phone. Rather it should be described as being “based on Boot to Gecko” technology – the initial moniker of Mozilla’s Firefox OS project.
Here’s the full statement Mozilla requested accompany the Peak+ news:
Today, Geeksphone announced the pre-sale of a new device based on Boot to Gecko technology. We want to clarify that this new phone that was announced is based on Boot to Gecko technology with pre-release software, but is not a certified or supported Firefox OS device.
As I noted in an update to the TechCrunch story, this is an issue of brand control. Technically speaking, Geeksphone has not yet jumped through the certification hoops to achieve FFOS certification. But it’s highly likely that that’s because it’s not possible for Geeksphone to do that yet. The startup declined to comment about the certification issue when contacted by TechCrunch, noting that they are partners with Mozilla and have been working closely with the organisation to build the Peak+.
From the outside looking in, it’s hard not to conclude that, despite this apparent partnership, Geeksphone is being treated as a second-class citizen vs. the carriers backing FFOS. After all, Telef nica’s first FFOS device (the ZTE Open) does carry the Firefox OS brand. So it is possible to gain certification at this early stage – at least, if you are involved with one of the carriers backing Mozilla’s open-platform play.
It’s possible that Geeksphone, with its more limited and therefore targeted resources, hasn’t been able to divert the required effort to gaining certification yet. But Mozilla’s response, when I asked for clarification about its Firefox certification guidelines, suggests otherwise – since they revealed they are still finalising their processes. Which in turn suggests the Peak+ branding bottleneck is being caused by the lumbering dinosaur, not the nimble startup. (Case in point: it took Mozilla’s PR one whole day to obtain these very partial answers to my certification questions.)
Q. What do device makers have to do to achieve certification as a Firefox OS device?
A. Because each device maker is a separate entity, the details of Firefox OS certification vary slightly from one to another. We will be publishing more details about how future partners can become Firefox OS certified soon.
Q. Do Firefox OS certified devices have access to specific apps that non-certified devices don’t? Such as the Firefox Marketplace?
A. As conversations with interested parties continue, we are finalizing our guidelines for device makers.
- Mozilla (apparently) hasn’t decided what FFOS certification entails – therefore it’s being slow
- But Mozilla is also being inconsistent because carrier supported devices have been able to obtain the Firefox OS brand stamp
- Ergo, Mozilla is playing favourites – specifically favouring its carrier supporters
Really, those conclusions should not surprise, given Mozilla’s late-to-the-mobile-market position and reputation for cumbersome development. It’s trying to turn those weaknesses into strengths by cosying up to the only folk likely to laud them. No wonder so many carriers are so keen to work with this open-source alternative. Mozilla’s branding strictures and usage enforcement are corporate modus operandi that will reassure the conservative telcos they are treading familiar ground with Firefox OS; that this open ecosystem is nonetheless policed to order, not encouraged towards anything-goes chaos.
Mozilla is demonstrating its willingness to back carriers’ desire to control and to own in order to differentiate itself from Android’s free-for-all which has ended up undermining telcos’ control of users and accelerating the decline of their traditional revenue streams. Fast-tracking carrier-backed devices to the front of the FFOS branding certification queue is just symptomatic of that underlying pro-telco strategy.
Mozilla has made something of a Faustian pact to try to establish an alternative open mobile ecosystem. And with Android so rampantly dominant, that may have been a necessary trade-off to give FFOS a fleeting chance. But it still leaves something of a bitter taste to anyone who roots for David over Goliath.
The European Commission has accepted book publisher Penguin’s proposals to scrap all of its existing ebook agency agreements – including its deal with Apple, most importantly – and refrain from adopting any similar partnerships for the next five years.
Penguin, along with competitors Simon & Schuster, Harper Collins, Hachette, Holtzbrinck, were all criticized for working with Apple and damaging the European ebook market by switching to an agency model.
This allowed the publisher, rather than the retailer, to set the sticker price seen by consumers in digital storefronts. Given that Apple takes a 30 percent cut of each sale regardless, this suited both the publishers and iBookstore vendor just fine. It also prevented other retailers, such as Amazon or Google, from undercutting these prices.
It differs from the wholesale model, whereby retailers are able to negotiate with publishers for the general rights to an ebook and then sell it at whatever price they like. The European Commission has concluded that Apple may have been trying to control ebook prices – a breach of antitrust rules in the European Union.
Under the new agreement, a two year “cooling-off” period will be instigated, by which all retailers will be able to discount Penguin ebook titles as they see fit.
The book publisher is also banned from using the so-called Most Favored Nation (MFN) clause – which meant publishers had to price ebooks on Apple’s services at least as low as the cheapest price offered by any other retailer – in all necessary renegotiations.
Joaqu n Almunia, Commission Vice-President in charge of competition policy, said: “After our decision of December 2012, the commitments are now legally binding on Apple and all five publishers including Penguin, restoring a competitive environment in the market for ebooks”.
A similar antitrust case in the United States came to a close in May this year when Pearson, Penguin’s parent publisher, confirmed it would pay $75 million in consumer damages. A US federal judge has since ruled that Apple truly did conspire to raise the price of ebooks across the market.
Apple has since confirmed that it plans to appeal the decision. “Apple did not conspire to fix ebook pricing and we will continue to fight against these false accusations,” company spokesman Tom Neumayr said. “When we introduced the iBookstore in 2010, we gave customers more choice, injecting much needed innovation and competition into the market, breaking Amazon’s monopolistic grip on the publishing industry.
“We’ve done nothing wrong and we will appeal the judge’s decision.”
Image Credit: LEON NEAL/AFP/Getty Images
6Wunderkinder is making a play for the enterprise market thanks to two new additions to the Pro version of its cross-platform Wunderlist task management app today.
Files – including images, spreadsheets, presentation decks, PDFs and audio – can now be added to tasks. While possibly of use to individuals, it’s easy to see how working teams could find this useful, with a project leader being able to share out tasks such as ‘update our brochure’ while attaching the current version to the task for reference.
Meanwhile, in a more overt play to the enterprise market, Wunderlist now has team and business pricing for the first time. There are six pricing tiers, ranging from $22.99 per month for 5 people, up to $1,749.99 for 500. 6Wunderkinder says that 40,000 teams and businesses already use Wunderlist, and the new pricing includes savings of between 10 and 30 percent over standard Pro accounts, which may well encourage others to take the plunge.
Wunderlist launched Pro accounts in April this year and Berlin-based 6Wunderkinder says that the app is now approaching the five million registered users mark across both paid and free accounts.
Last month, Russian Internet giant Yandex unveiled Islands, a feature that brings interactive snippets of content to its search engine, and now it has been released in beta across three countries.
The idea behind Islands is to provide a richer set of search results to give users more options and details relating to websites that show up. Islands initially launched in Turkey only, but it is available to users in Russia and Ukraine too.
The feature currently covers search, images, video and the main Yandex page, but that will expand to other services in time, the company says.
Essentially website managers can make their search results more compelling for users. For example, by providing options for a site that users can take advantage before they actually click through – like logging into a Russian Airlines account from the search results page.
Yandex previously explained that there are different types of Islands, ranging from search snippets, which are basic descriptions that appear below each search result. Site links can also be added to allow users to navigate to specific pages. Finally, there are interactive snippets which present more advanced options, such as logging into accounts from the search results page.
The company says that Islands is available across all devices – computers, tablets and smartphones – though it will take a while to make its way to the company’s full set of core markets. Since it has a beta tag, we can expect more features and tweaks to come too.
Islands is another impressive piece of engineering from Yandex, which previously launched Shell – a Facebook Home-like launcher app for Android devices – and partnered with Opera to promote the Android ecosystem in Eastern Europe.
The company is the dominant search provider in many Eastern European markets, but it gained worldwide attention last year when it released Wonder, a voice-controlled search app for Facebook. Despite the positive reviews it was little wonder that Facebook cut the app’s access to its API, leading to its withdrawal from the App Store.
This week has been notable at Yandex for tragic reasons. Company co-founder and CTO Ilya Segalovich passed away on Thursday after losing his battle with cancer.
Headline image via Thinkstock
Train driver Francisco Jos Garz n, 52, arrested
Black box data crucial in finding out why train was speeding
Seventy-eight killed in crash near Santiago de Compostela
The black boxes from the high-speed train that hurtled off the tracks in north-west Spain have been recovered from the wreckage and handed to investigators, officials say.
The recorders, which register speed, distances and other data, are crucial to resolving the mystery of why the Alvia 151 shot into a tight bend in the approach to Santiago de Compostela at more than twice the approved speed.
Police in Santiago de Compostela said the driver of the train, 52-year-old Francisco Jos Garz n, had been under arrest since Thursday evening.
El Pa s reported that Garz n had received an order to reduce speed just seconds before the crash, and acknowledged it by pressing a button in the drivers’ cab. It remained unclear whether he had been unable or unwilling to brake the train, which was running five minutes behind schedule.
A spokeswoman for the courts in Santiago del Compostela, Mar a Pardo R os, confirmed on Friday that the train’s “black boxes” had been found, but did not indicate how long the analysis would take.
Police revised the death toll on Thursday to 78, but said the count could change as body parts were identified. Antonio del Amo, head of the Spanish national police’s central forensic unit, said 78 bodies had been recovered, together with numerous body parts. He said that six of the corpses had yet to be identified.
The city’s police chief, Jaime Iglesias, said Garz n would not be interrogated on Friday.
Garz n was led from the scene of the tragedy with his face covered in blood. He was given nine stitches to a head wound, but was otherwise apparently unharmed.
The driver spent the night in hospital with his mother at his bedside and under police guard. Contacted by telephone by the regional newspaper, La Voz de Galicia, Garz n refused to comment beyond saying “You [can] imagine how I am.”
In a recorded call to the emergency services shortly after the disaster, Garz n reportedly said: “I should have been going at 80 [km/h] and I am [sic] going at 190.” He reportedly added: “Let’s hope there aren’t any dead.”
Garz n reportedly tested negative for alcohol following the crash.
Colleagues described Garz n as an experienced railwayman who had worked for Spain’s national rail company, Renfe, for around 30 years. He had been a driver since 2003. The company’s president, Julio G mez-Pomar Rodr guez, said Garz n, from Monforte de Lemos, also in Spain’s north-west, had worked on the Ourense to Santiago stretch of the high-speed network where the accident took place for more than a year.
Garz n’s position was compromised by the emergence of a photograph that he posted to his Facebook page showing his speedometer at 200km/h. It was not clear if, when the photograph was taken, he was on a stretch of the network where high speeds were permitted.
It nevertheless surprised Garz n’s friends. One wrote: “You’re going like the bloody clappers, lad. Brake.” The driver replied: “I’m at the limit. I can’t go faster, otherwise they’ll fine me.”
The daily El Mundo, which first published the photograph and the exchange of messages on its website, said that they had been removed from Garz n’s Facebook page.
The accident took place just after the point at which one safety system gives way to another. For the first 80km after Ourense, the line is ostensibly governed by the EU-sponsored European Rail Traffic Management System (ERTMS), which would have braked the train automatically. However, on the approach to Santiago de Compostela station the track is subject to Spain’s ASFA system. This will stop a train altogether, but only if it is travelling at more than 200km an hour.
At lower speeds, warning signals are emitted. But it is left to the driver to implement them.
The train derailed just a few hundred metres beyond the cut-off point for the ERTMS, raising the question of why the system did not intervene to brake the train earlier.
El Pa s quoted a government source as saying that, even on the stretch of the line on which the ERTMS had been installed since November 2011, it was not used. No reason was given.
According to Renfe, there were 218 passengers and five railway staff on the train involved. It is Spain’s worst rail accident for more than 40 years. By late on Friday morning, 83 people were still in hospital, with 32 of them on the critical list.