A major PR and advertising shakeup is looming for several big CE and appliance brands with the tipped acquisition of the Interpublic Group by the Omnicom Group, the move would challenge WPP the owner of Ogilvy & Mather and their Ogilvy PR operations in Australia.

According to the Wall street Journal Omnicom is in advanced talks to acquire Interpublic Group a deal that would create the world’s largest advertising company, according to people familiar with the matter, among their clients are Apple, Mastercard, LG Electronics and Panasonic.

The all-stock deal is likely to value Interpublic at between $13 billion and $14 billion, excluding debt, some of the people said.

Interpublic had a market value of nearly $11 billion as of Friday.

At this stage it’s not known whether the deal will lead to job cuts.

If the deal is concluded the combined entity would have net revenue of more than A$31 billion, based on their 2023 financials.

A transaction could be announced as early as this week, according to insiders.

Among the PR agencies that could be impacted by the deal Webber Shandwick and Porter Novelli as well as Fleishman Hillard.

The WSJ claim that by combining Omnicom, the world’s third-largest ad company, and Interpublic Group, the fourth-biggest ad company, would topple WPP as the industry’s biggest player. WPP’s net revenue last year was about $15.1 billion.

A deal would bring together some of the world’s best-known ad brands under one roof, following decades of consolidation on Madison Avenue. A handful of conglomerates are the power players behind the majority of ads people come across on TV sets, before they can play YouTube clips and on roadside billboards. In addition to producing advertisements, the companies own firms that buy ad space, develop loyalty programs, analyse shopper data, handle crisis communications and tap influencers for marketing campaigns.

Omnicom and Interpublic have helped create some of history’s most iconic ads, including “Think Different” for Apple, “Priceless” for Mastercard, “Because I’m Worth It” for L’Oreal and “Got Milk” for the California Milk Processor Board.

Omnicom, led by Chief Executive John Wren, includes agencies BBDO, TBWA, Fleishman Hillard, and ad buyer Omnicom Media Group and works for companies including Disney, AT&T and PepsiCo.

Interpublic, which CEO Philippe Krakowsky leads, owns agencies such as McCann World group, Weber Shandwick, FCB and ad-buying firm Mediabrands, and has a client roster including L’Oréal, Johnson & Johnson and Geico.

Observers claim that merger could help Omnicom and Interpublic become better equipped to deal with an industry increasingly driven by technology, data and artificial intelligence.

UKRAINE – 2021/12/20: In this photo illustration, The Interpublic Group of Companies, Inc. logo seen displayed on a smartphone and in the background. (Photo Illustration by Igor Golovniov/SOPA Images/LightRocket via Getty Images)

Currently the advertising industry is under siege with companies such as Alphabet’s Google and Meta Platforms using AI to drive deeper into advertising and media agencies business models.

In Australia several media Companies have also lost traffic this year due to Google and big tech Companies changing algorithms so that they can go after media Company business directly.

Research Companies claim that Generative AI threatens to disrupt how agencies get paid and could potentially diminish demand for copywriters, graphic designers and the ad buyers, who decide where to place ads to target the right audiences for CE and appliance Companies.

Research firm Forrester said last year that automation could eliminate some 33,000 jobs, or almost 8% of the workforce, at ad agencies by 2030, with various forms of AI being responsible for a significant portion of these losses.

Currently Interpublic and WPP are struggling to keep pace with rival Publicis, which adapted faster to the technological shifts that reshaped how brands connect with consumers Publicis list Samsung as one of their clients via Leo Burnett.

The Paris-based firm has spent billions on buying data and e-commerce companies.

It has also targeted companies that specialize in digital transformation advisory work to better position it against consulting firms with a growing presence in the advertising and marketing business.

Interpublic has trailed its rivals, losing business from big clients such as Spotify, and BMW. It most recently lost the bulk of its most lucrative account, Amazon ad buying assignment, which was split between Omnicom and WPP.

Krakowsky has been actively shopping Interpublic and parts of the conglomerate for more than a year and talking to a range of parties, including private-equity firms Apollo and KKR, according to people familiar with the talks. The company has also enlisted McKinsey to help with a restructuring and cost-cutting initiative, according to people familiar with the matter.

The WSJ claims that a deal between Interpublic and Omnicom would likely face government scrutiny, as the combined company would be a dominating force in the ad-buying space. Global ad spending is expected to top $1.03 trillion, excluding political advertising, according to GroupM, the ad buying arm of WPP.