The Omnicom-IPG merger may look like a global play, but in a market like New Zealand, the local fallout could be massive. Alex Radford, partner and co-founder at D3, analyses the potential consequences.
New Zealand’s media landscape is facing a defining moment – and it’s all come down to Omnicom’s acquisition of Interpublic Group.
The merger, which has been cleared by the Commerce Commission in Aotearoa, would create the advertising industry’s largest holding company.
In New Zealand it would potentially have an outsized impact on our small market.
To be clear, I’m examining this merger specifically through a media lens – focusing on the media buying and planning operations, not creative, digital, PR or other agency services.
The numbers tell a compelling story: StopPress reported Omnicom Media Group already commands nearly 48% of the New Zealand media agency market, and adding IPG’s 7.5% would result in a single entity controlling approximately 55% of our media spend.
That’s not just a big fish in a small pond – it’s a controlling stake in our entire media ecosystem.
While the standard competition narrative examines agency-to-agency competition, the real concern lies with media owners. In our uniquely concentrated ecosystem, small shifts in negotiating power can have an outsized effect.
No easy pivot
Media owners, unlike agencies, can’t quickly diversify their customer base if one dominant buyer flexes its muscles. They operate with high fixed costs and limited pricing flexibility, already navigating stormy seas thanks to tech giants.
We know that the global holding company model operates through an arbitrage system also known as “principal media” – buying media at volume-discounted rates, marking up and repatriating profits offshore. So-called as the agency stops being an agent and becomes the principal.
This becomes problematic when one entity dominates market demand, potentially turning our media ecosystem into a throughput mechanism for offshore value extraction.
The common claim – that this model delivers better value for clients – deserves scrutiny. According to the Association of National Advertisers (ANA), principal media can produce media cost savings of less than 10% for some marketers, but the reality is more complex.
When agencies act as principals rather than agents, they can apply significant markups – the ANA has found these markups can range from 30% to 90%.
For larger media owners, such as TVNZ and NZME, the immediate effect means facing a single negotiator controlling more than half their potential revenue. This could lead to aggressive rate negotiations and inflexible terms during inevitable economic downturns.
Harder for little players
Smaller publishers face even greater challenges. I’ve even encountered cases where local publishers can’t even get on Omnicom’s “approved vendor list” without a formal trading agreement.
The Commerce Commission must assess longer-term structural impacts rather than immediate competitive effects. Once clearance is granted, few mechanisms exist to address harmful post-merger conduct that might emerge over time.
Let’s be clear: if a TV, radio or news network goes under a year or two down the line, this will be a causality, not just a correlation. Beyond commercial concerns, this concentration level could fundamentally reshape the stories and voices told and heard in Aotearoa’s public discourse.
Whatever the regulatory outcome, our industry must champion transparency, fair negotiations and continued investment in local media partnerships.
The Commerce Commission has a unique opportunity to safeguard New Zealand’s media diversity before irreversible damage occurs.
The consolidation train won’t stop – the real question is how we adapt the tracks to ensure it benefits our entire ecosystem, not just its largest players.
This story comes from NZ Marketing magazine issue 83, Jun-Aug 2025. Why not subscribe? Get four issues a year for just $50 (including delivery) if you autorenew.
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