Advertising in Crisis: How the Turmoil Threatens All Media

The ad business today is far from what it once was. The traditional patterns of promoting products have drastically changed in the last decade because of the reliance on smartphones, tablets and other digital devices. The advertising industry and the firms that have created elaborate campaigns for decades have had to change radically as well. Media critic and best-selling author Ken Auletta looks at this dramatic shift in his new book, Frenemies: The Epic Disruption of the Ad Business (and Everything Else). Auletta joined the Knowledge@Wharton radio show on SiriusXM to talk about his book. (Listen to the podcast at the top of this page.)

An edited transcript of the conversation follows.

Knowledge@Wharton: You say that the ad industry is in crisis right now. What’s causing it?

Ken Auletta: The title Frenemies is based on two larger points. One is that traditional ad agencies, as featured in places like [the television show] “Mad Men,” are being disrupted by people who used to be their friends but are increasingly their competitor. Clients are taking more and more [projects] in-house away from the agencies. But the biggest frenemy, I would argue, is the public, which doesn’t want to be interrupted by advertising, particularly on the dominant device of our age, which is the cellphone.

Knowledge@Wharton: How significant are these issues for the ad industry?

Auletta: Oh, they’re huge. Think about how the world has moved to smartphones, which are really the most personal devices. You don’t lend your smartphone the way you wouldn’t lend your wallet or your purse. Suddenly, to be interrupted by an ad that consumes your battery life, that’s not pleasing to watch on your small screen. We hate pre-rolls, we hate banner ads, and it’s just annoying. So, the advertising community’s challenge with this was to figure out a way to make an ad feel like it’s not interrupting you, like it’s not a bother to you. What they said is, “We have so much data about you that it won’t feel like an ad. It will feel like a service to you.”

You’re walking along the street, and we know you bought a sport jacket a month ago at Barney’s. We can follow you on your GPS. If you’re only two blocks from Barney’s, walk in and we’ll give you 20% off a new sport jacket. How will you feel about that? Will you say, “Hey this is a great service, a great discount.” Or will you say, “This is kind of creepy. How do you know so much about me?”

You’re talking about an industry in turmoil. One of the reasons I wrote this book is because you can see … how newspapers and magazines and television have been disrupted by the Googles and Facebook in the digital world. Well, who funds all of these media institutions? Who funds 97% of Facebook’s revenue? Advertising. Who funds 90% of Google? Advertising. Who funds newspapers? Advertising. If advertising is suddenly being hit by the same kind of disruptions that all of these other industries are hit by, then the funding mechanism is threatened. Therefore, all of media is threatened.

Knowledge@Wharton: Advertising has had the use of data for as long as the industry has been in existence. How different is it now because of the volume, accuracy and speed of data collection?

“The people who sit at the head of the table are the people who have the data.”

Auletta: The data that we have today because of the digital world is different. Digital takes a fingerprint and has a record of everything you’ve watched, every search you’ve done, everything you’ve read, how much time you spend on Netflix. Traditionally, [advertisers] didn’t have that. [It wasn’t] digitized.

Google, Facebook and Amazon have the best data of all. That data is not matched by what the ad agencies have. Increasingly, the people who advertise are saying, “Hey, why shouldn’t I go directly to Facebook and Google, and increasingly Amazon, rather than deal through the agencies?”

Knowledge@Wharton: How have people in the industry evolved over time?

Auletta: In the “Mad Men” days, the creative guy like Don Draper was in charge. He sat at the head of the table. Today, that no longer is true. The creatives don’t sit at the head of the table. The people who sit at the head of the table are the people who have the data. The media agency, the media buyers, the people who buy the ads and shape their strategy and target the ads on particular people — they are the dominant forces at the agency. But increasingly, the agency is being disrupted by other forces. Consulting companies, which used to consult with them or used to be their accountants, are now aggressively getting into the advertising business. PR agencies are getting into advertising, particularly as newspapers and the traditional publishing platforms are saying, “Wait a second, we can become ad agencies, too.” The New York Times has a sales force of over 300 people. One-third of them are bypassing the agency and going directly to clients and the advertiser and saying, “Let us create your ads.” That just creates a tremendous amount of turmoil in the advertising world.

Knowledge@Wharton: Will advertising agencies even be around in 10 or 20 years?

Auletta: They won’t be there the way they were 30 years ago. The odds are they will be there in some form, but it will be a very different form. They will probably be smaller than they are now; they will probably have to get into other businesses. Increasingly, they will be challenged by others who weren’t in the ad business 30 years ago — the Facebooks and Googles and publishing platforms who increasingly say they can do it. Or the clients will say, “Why are we spending all of this money on ad agencies? Let’s create our own in-house ad agency.”

The world is changing. But two of the big issues in the future that we can’t know the answer to is, one, the privacy issue. Will the public at some point say, “You have all of this data and you say you want to use it to target me, but what about my privacy?” Will the public raise that privacy issue as they have, say, in Western Europe, where they have imposed some real changes in the data that can be collected? We don’t know the answer to that.

The second question is, will the government at some point [decide that] Facebook, Google, Amazon and Apple are [too] big? Are there monopoly questions? Are there questions of privacy? Are there regulations that we should impose to level the playing field?

You saw that when Mark Zuckerberg was summoned to appear before Congress. Even though many of the questions he was asked were semi-literate, they expressed the concern for privacy and monopolization power that a company like Facebook potentially has. By the way, it’s a bipartisan issue. I don’t see a cleavage between Republicans and Democrats on this issue; there is a shared concern.

Knowledge@Wharton: Have ad agencies already started to make changes in their operations?

“The thought that [subscriptions] could substitute for advertising is crazy. It’s not going to happen. It’s a false god.”

Auletta: There’s no question they have. It’s an insecure industry as any industry is when they are going through tumultuous change. One of the things they have done is created these five giant holding companies, and they are no longer just dominated by ad agencies. They now have public relations firms they buy, lobbying firms they buy, polling firms and design firms.

Increasingly, they are realizing they have to not just rely on advertising, they also have to get into the marketing business. That has been the change that has taken place over the last 10 years, and it is a profound change. Beyond that, they are asking, “Are we too big? Can we move fast enough? Do we have to get smaller, do we have to slim down?” Those are questions that will haunt them for many, many years.

The other [problem], which they tend not to want to talk about, is that the pay scales in the advertising business are among the lowest of any major industry. If you are someone in college and you are about to graduate, you would much rather go to work at LinkedIn or Facebook or Google than you would for an ad agency, where your salary would be half of what it would be at a digital company.

Knowledge@Wharton: How much has the mystique surrounding the industry changed because of the digital shift?

Auletta: Go back to “Mad Men” again — Don Draper, the glamour of the ad business and the so-called three-martini lunch. Graduates saw it as a glamorous business. You had David Ogilvy and these prominent names in the ad business. It was really a romantic industry. That doesn’t exist the way it once did, and in part it doesn’t exist because the pay scales are so porous.

Knowledge@Wharton: The way people consume the content is changing. For example, you have a lot more subscription services out there now than even five years ago. Does that impact the industry?

Auletta: It does. One of the things I address in my book is that there are people who believe that the way you substitute for ads that may decline is you go to subscription models. But think about that: The one thing that Donald Trump and Hillary Clinton agreed on in the 2016 presidential campaign is that the working class, the middle class, the bulk of the American population hadn’t had an income rise in a decade. The average subscription cost today for the American home is $280, and that doesn’t include gas and electricity. The thought that [subscriptions] could substitute for advertising is crazy. It’s not going to happen. It’s a false god. Advertising is essential to keep alive so many industries.

Knowledge@Wharton: How then do these new approaches change when you are talking about reaching that next generation? Millennials are driving a lot right now, but Gen Z is right on the cusp of making a significant contribution as well.

“People don’t like ads, so what replaces the traditional ads that they don’t like? That’s a fundamental question.”

Auletta: Think about them watching television on their cellphones. Are you are going to interrupt them with a 30-second ad on their cellphone while they are watching it? No way. It becomes a real challenge. What is the new form that advertising takes that will entice Generation Z and millennials to pay attention to it? Twenty percent of Americans have an ad blocker on their cellphone. One-third of Western Europeans do. That means ads can’t get through. When you record a program on your DVR, according to Nielsen, 55% of people skip the ads when they watch that program.

People don’t like ads, so what replaces the traditional ads that they don’t like? That’s a fundamental question. We don’t know the answer to that, but among the answers people talk about is the six-second ad. If you had a two-minute ad block and you had six-second ads, that means 20 ads [in that block]. How would you like to be the 10th ad in that two-minute block? Not very appealing.

What the ad world has to do, and they are doing it, is throw stuff up against the wall and see what sticks. Try a lot of different things. We don’t yet know what the replacement is, what the future holds. But we know you’ve got to try things, and we also know that advertising is essential to support media. How do you have a free-enterprise system? How does the buyer learn what the seller is selling except through advertising? It’s a fundamental process, as annoying as it often is.

Knowledge@Wharton: The idea of frenemies speaks to the relationship between the ad agency and all of these other entities that can be friendly, but they are rivals as well. Will that relationship continue to get closer, or will the divide grow larger?

Auletta: I think the odds are there will be a bigger divide because people worry about themselves. Let’s say you are The New York Times or NBC and you see your ratings, your audience and your ad revenue shrinking. What other source of revenue can we generate here?

One of the other sources of revenue would be to become an ad agency … and to sell ads. So, everyone in the media world and in the world of industry is constantly saying, “What other new source of revenue can we generate? What are the threats we have to worry about, and what do we do to counter those threats?” As they do that increasingly, it is very hard to imagine how people who have traditionally been partners or friends get closer.

Knowledge@Wharton: If some of those entities, like the newspapers, had taken that approach 10 to 20 years earlier, where would they be sitting now?

Auletta: I think 20 years ago they wouldn’t have done that because they were so heavily reliant on advertising and on ad agencies. And they didn’t see the digital threat coming. What they should have done 20 years ago is seen the digital threat coming and created digital newspapers. And when they did create digital newspapers, what did they do? They said, “But we can’t post news on it until the next morning after it appears in the newspaper.” Well, that’s insane.

Initially, the other mistake they made was they gave their information away for free. Now, as they charge, newspapers are finding that people won’t pay a subscription for their local newspaper. They won’t pay for digital local newspapers, so havoc is being wreaked on traditional newspapers in smaller cities, and it is a real issue. Papers like The New York Times, The Wall Street Journal, The Washington Post, with deep-pocketed owners, can survive that onslaught. But it is very hard for papers like The Detroit News, the St. Louis Post-Dispatch, the [New Orleans] Times-Picayune to equally survive.

Frenemies: The Epic Disruption of the Ad Business (and Everything Else)

Here's What Happens When A Grown Woman Wears Axe Body Spray For A Week

Probably if I had watched the commercials first, I would never have undertaken this whole stupid experiment.

Axe commercials? Awful. They are the media equivalent of the fragrance itself. I mean, naked ladies covered in tiny congruent triangles assault bemused middle managers. These are commercials that could have been made by Russian porn stars from the mid-1960s, or backstage at a Victoria’s Secret fashion show, if angels really liked feathers in their strawberry milkshakes.

Nor did I come to Axe men’s fragrance by sniffing the air at the U.S. Supreme Court —no one at the solicitor general’s office wears the fragrance. (Who says government can’t do anything right?)

Me, I discovered Axe the usual way, through my 13-year-old nephew, for whom the whole prospect of a lifetime of boom-chicka-wah-wah is perhaps still too much to contemplate.

My own boys, at 8 and 10, are too young for Axe, or for fragrance, or for wah-wahs of any variety—or so I shall insist to myself until they are about 40. But after a single day at the beach this past August, when they shared a bathroom with their big hockey-playing Axe-scented cousin-slash-hero, even the 8-year-old was smearing his small hairless self with the body wash, the deodorant, and, in case he still couldn’t be smelled from the next pier over, the spray cologne.

I decided to handle this olfactory terrorism like a mature adult: several days of merciless teasing. Dinners quickly became unbearable, with three Axe-drenched young people fogging up all tastes and smells until your pasta simply tasted like the painful ache at the back of your tongue that occurs when every boy in the house sees a daily Axe dip as part of his grooming. On it went, until the final weekend at the beach, when I found myself trapped in the shower with only a bottle of three-in-one Axe ™ product (shampoo, body-wash, and conditioner). So I broke down and used it.

Sunshine. Harps. It was the most sublimely powerful fragrance experience of my adult life. Truly. After decades of smelling like a flower or a fruit, for the first time ever, I smelled like teen boy spirit. I smelled the way an adolescent male smells when he feels that everything good in the universe is about to be delivered to him, possibly by girls in angel wings. I had never smelled this entitled in my life. I loved it. I wanted more.

When I first told my husband that I was planning on wearing only Axe men’s products for an entire week, his answer was a foreshadowing of things to come: “You’re planning on wearing that stuff to bed every night for a week? Man. Axe really does work. It’s only been a few minutes and look, you’re already single again ... ”

I confess that it was hard to choose a fragrance. My 13-year-old nephew advised me to steer clear of the “nasty grossness”-scented products. All of the Axe scents, to the extent that they differ, seem to be mostly named after manly activities like mining or soldering. Ultimately I opted for Cool Metal (see: mining and soldering) in the body wash, shampoo, and spray formulations.

What happens when a forty-something woman walks around smelling like a 13-year-old boy for a week? Mostly nothing. As it turns out, ours is a culture in which, as a general principle, people don’t really feel comfortable commenting on your scent, even when it is so powerful as to be causing climate change. So even if you apply Axe before a funeral—as I did—nobody is going to grab you by the arm and ask you to please leave. I wore a heavy coating of it to a dinner party one night. Eliciting no response, even when I started helpfully jamming my neck into the other guests’ noses, I did learn from several mothers that the Wall of Axe (a naturally occurring phenomenon in which eight or more teen boys reapply Axe after phys ed, then stand in the stairwell together) has become so bad at some local schools that it’s been banned altogether. Another guest described a perennial teen rite of passage—the agony of spraying Axe down your own pants for the first time.

Despairing of any kind of social response that wasn’t either threats of a formal legal separation from my husband or subtle nostalgia from mothers of former Axe users, I decided to trot out the stuff at the last night of Slate’s annual retreat in September. Having sprayed it liberally all over my body on the night of the big prom-like party, I watched my roommate—Slate’sDear Prudie—actually flatten herself up against a hotel room wall and slide uneasily down the hallway, in the manner of that poor cat being chased by Pepé Le Pew. Almost immediately upon my arrival at the festivities I was accosted by three female Slate colleagues who spontaneously observed that I smelled completely amazing. I was briefly thrilled at the enthusiastic response, until I realized that I didn’t really want my someday teenaged sons to ever be quite that amazing-smelling to women in their 30s and 40s. One colleague said it brought her right back to whatever it is that happened in the back of a truck when she was herself 14. The silence was slightly less awkward than after the pants-spraying story the week before.

And even the unfailingly gracious John Dickerson—who has chronicled his own Axe-related demons—simply refused to confront me with how bad I smelled, even when I so aggressively violated his personal space that I could have been repurposed as an HR training film. Truth be told, it was Slate’s own Gentleman Scholar, Troy Patterson, who tactfully advised me to go back upstairs and apply a good deal more “scent”—his word—if I really wanted to get someone to react. And so I reapplied three times, the way a junior on the rugby team might. And then, we danced. I smelt it, I dealt it. And it was good.

The truth is, my experiment in smelling like an adolescent male for a week had only two really profound consequences. One, I really did grow to love the fragrance. And no. I don’t want to talk about it. But two, and distinctly more important, both my kids were so embarrassed that they stopped using it within days of my initiating the experiment. Smell you later, Axe. It turns out that there is some Freudian window in which smelling like your mom is so beyond contemplation that they wordlessly gave it up altogether. Indeed, they have both moved quite deliberately backward to the Suave Baby Shampoo, which is precisely where I would like them to stay, at least for a while. And thus, drenched in the smell of rusting metal, we all take two steps away from the Axe years, the entitled years, the boom-chicka-wah-wah years, that are bearing down upon us too quickly.

This post originally appeared at Slate. Copyright 2013. Follow Slate on Twitter.

SEE ALSO:  Online Dating Will Soon Be Obsolete

Read more: http://www.slate.com/articles/double_x/doublex/2013/10/axe_men_s_body_spray_what_happens_when_a_woman_wears_it_for_a_week.html#ixzz2iYHeUE00

Submarine Rises Through Milan's Pavement In Ridiculous Publicity Stunt

This morning, Milan awoke to find something a little strange. Just off of Via dei Mercanti, near the heart of the old city, a submarine has apparently pushed its way through the paving stones and damaged a nearby car.

A photograph of the bizarre scene made the front page of Reddit's WTF subreddit, as confused Milanese began surveying the scene:

This sounds ridiculous, of course, and if you can read Italian, you've already sussed that something isn't quite right about this.

Europ Assistance IT, an insurance group based in Italy, had come to the street early in the morning to construct the fake submarine as part the marketing for their "Protect Your Life" campaign — which has its own website here.

The company even went so far as to hire some fake submariners who give interviews:

See more photos of the sunte over at the La Repubblica website.

Read more: http://www.businessinsider.com/submarine-appears-on-milan-street-2013-10#ixzz2gf12iVWK

Here's Why Pinterest Advertising Will Be Huge With Retailers

The knock on social media was that it would never drive a lot of paying customers to retail sites, because people are on social networks to connect with friends, not to shop. 

But Pinterest is proving to be an exception to that rule. The company's announcement yesterday that it would begin experimenting with "Promoted Pins" will cause major retailers to rejoice. Here's why: 

• Pinterest users make the largest purchases among customers referred to e-commerce sites by social media, with an average order value of $93 in this year's second quarter, according to Monetate. (See chart, below.)
• It also accounts for 23% of all social media-driven e-commerce sales, despite being a significantly smaller social network than Twitter or Facebook.
• Pinterest has been shown to increase offline purchasing too, and is emerging as a "showrooming killer," by driving online browsers to shop at brick-and-mortar stores. 

At BI Intelligence, Business Insider's paid subscription service, we recently analyzed over 25 datasets culled from a variety of sources to probe the viability of social media as a commerce and retail-driver. We published our insights in two recent reports, "How Social Commerce Is Going After The Entire Purchase Funnel," and "The New Art Of Social Commerce: How Brands And Retailers Are Converting Tweets, Pins, And Likes Into Sales."

Subscribers also gain access to over 100 in-depth reports and hundreds of charts and datasets on mobile, social, and their impact across industries, including retail. 

BI Intelligence

While e-mail, search and other sources of customers, or "referrals," are still more effective as referral sources, social media is gaining. Customers referred by social media are making larger and larger purchases, $87 on average in the second quarter, or $11 more than a year before.

Pinterest's move toward ads also comes days after Instagram's CEO suggested that the photo-sharing service might also position itself as a social commerce platform for brands and retailers. 

To access BI Intelligence's full report, The New Art Of Social Commerce: How Brands And Retailers Are Converting Tweets, Pins, And Likes Into Sales, sign up for a free trial subscription here. Subscribers also gain access to over 100 in-depth reports on social and mobile, and hundreds of charts and datasets. 

Read more: http://www.businessinsider.com/pinterest-ads-may-drive-high-value-orders-2013-9#ixzz2fikbLvm0

5 Fascinating Brain Tricks Publishers Use To Get You To See Their Ads

As we've told you in the past, one of the biggest challenges advertisers face on the web is making sure the ads they pay publishers to display are actually seen by the people who visit the site.

Media tracking firm comScore estimates that nearly half of internet display ads are not viewable, meaning that people can't see them either because they are loaded in places that don't show up on their screens or because publishers fraudulently serve layers of ads behind the page shown to the public.

But according to Sticky, a firm that uses eye-tracking technology to figure out exactly which ads people look at, the actual number of ads people see is closer to 14%. According to company president Jeff Bander, people's brains are trained not to look at certain places on a page, meaning many ads publishers serve are merely white noise.

1. Images on the left, text on the right

CYH.com

When a brand displays a logo, it's important for the image to be on the left, with text residing on the right.

Here's why: the right side of our brains are used to process images and the brain processes visual information inversely. In order for the brain to process an image on the right side of a logo, it would first have to flip the image over again before doing so. This saves your brain work, and makes it less likely that its 100 billion neurons will shift focus to something else.

2. Use ambiguous facial expressions

Shemp65 via Flickr

When the brain encounters a face, it goes through a mental checklist of all the facial expressions it's seen previously. If the brain sees a smiley face or a frown, it immediately recognizes that the person in question is happy or sad, and then goes on to something else. But using an ambiguous facial expression forces the brain to investigate your image further.

Like the Mona Lisa. How many hours have people spent over the years trying to figure out what she's thinking?

3. Less is more

Randolph Leader

As anyone who has ever illegally downloaded TV shows online already knows, inundating someone with ads makes it less likely that they'll actually consider them.

"With ad-blocking technology advancing, publishers need to balance between ad revenue and content more than ever," Bander said. "Smart publishers will limit the number of ads and ultimately increase revenue because consumers will put up with ads if they are not the dominant real estate on the site."

4. Rounded Edges Are Best

Flickr / DeclanTM

Over the course of time, evolution has taught human beings that sharp, pointy things tend to hurt and should be avoided if at all possible. Because of this, using sharp edges in design creates an avoidance reflex that causes the brain to send a signal to the viewer to momentarily retreat.

If you've noticed, Apple (until recently) never used pointed edges in any of its products, using rounded edges to draw people in instead of pushing them away.

5. The Rule of 1.5

Mario Tama/Getty Images

Sticky's research has found that an ad that is viewed for 1.5 seconds or more is much likelier to make the consumer remember the brand and focus on its message.

Bander said ads that are viewed for under one second pose a major challenge to advertisers and those that are viewed for two seconds or more are what he calls "the sweet spot."

Now take a look at some ads your brain will be happy to focus on.

Nike

Click here for 25 awesome Nike ads that shaped the brand's history

Read more: http://www.businessinsider.com/5-brain-tricks-publishers-use-to-increase-ad-views-2013-9?op=1#ixzz2fLk7WF00

These Are Worst Client Conflicts Created By The Biggest Ad Company Merger Ever

When a major marketer chooses to spend hundreds of millions of dollars with a certain ad agency, it usually doesn't expect its arch rival to be housed under the same roof.

But after holding companies Omnicom and Publicis announced its surprise merger Sunday, making it the biggest ad entity in the world, the world couldn't help but notice that huge nemeses had overnight become part of the same family. Pepsi and Coke. AT&T and Verizon. Apple and Google.

Omnicom CEO John Wren adamantly stated that he was not concerned about conflicts of interest.

"We're going to work extremely hard with our clients over problems and try to come up with creative solutions," he said."But at this point, if the deal is completed, there is — I don't believe, a significant client ... no single client would be significant enough to disturb the deal."

As holding companies have gotten bigger, and conflicts more common, they have come up with creative ways to retain conflicted business. Accounts can be split by geography or by agency, with "firewalls" between them. It's up to the client to trust that the splits are done in good faith, however.

According to the Wall Street Journal, "One analyst said he has heard several times from executives, generally, that if two top ad agencies combined they should expect to lose about 8% to 10% of combined revenues because of conflict clients." Wren thinks the biggest loss would be 1% of revenues.

Since some huge companies with boatloads of different products, like Procter & Gamble, already had different goods living in both Publicis and Omnicom, the merger won't be dramatic for some major clients. But for companies that don't like competition — S.C. Johnson historically hates conflict — the partnership could be problematic.

Here are some of the biggest conflicts:

SODA

• Coca-Cola (Publicis' Leo Burnett) vs. PepsiCo. (Omnicom's TBWA)

Pepsi's entire ad campaign in the 1970's and 80's revolved around the Pepsi Challenge, which had a sole purpose of proving that consumers liked drinking Pepsi more than Coke. The fact that the two rivals will now be living under the same roof is by far the biggest conflict created by the merger. 

Ad Age wonders if WPP and Interpublic, two separate holding companies that have both worked with Coca-Cola, might have the ability to steal away the soda.

WIRELESS PROVIDERS

• AT&T (Omnicom) vs. Verizon (Publicis)

In fact, almost every telecom company (AT&T, Sprint, T-Mobile, Verizon) will now be under Publicis Omnicom Goupe's creative control if no one moves.

TECHNOLOGY

• Apple and Microsoft (Omnicom) vs. Samsung and Google (Publicis)

BEER

• MillerCoors's Miller Light (Publicis' Saatchi & Saatchi) vs. Anheuser-Busch's Bud Light (Omnicom's BBDO)

A-B InBev, however, isn't concerned and has different labels with each holding company. "It doesn't change anything related to agency conflict," VP of marketing Paul Chibe told Ad Age in an email. "The holding-company approach is to have different network shops to manage potential conflicts. That doesn't change in the event of a merger. We work with Publicis and Omnicom agencies in many countries."

AUTOMOBILES

• There's a lot of car overlap between the company, although the divergences could still result in conflict. Nissan, General Motors, Toyota, and Volkswagen all have business in both holding companies, Ad Age reports.

A Nissan spokesperson told Reuters, "Renault and Nissan are both major global clients of both Publicis and Omnicom. We welcome the direction taken by Publicis and Omnicom to create a best-in-class communications, advertising, marketing and digital services company and will continue to work with them."

BMW sales chief Ian Robertson, on the other hand, was less optimistic. "Ideally, clearly we (would) have that independence from other manufacturers," he said. "But in a world which is now connected and there are so many mergers of this type, maybe that's something that is not an ideal position."

SEE ALSO:  Here's the big downside to the Omnicom-Publicis merger

Read more: http://www.businessinsider.com/the-biggest-conflicts-created-by-the-most-massive-ad-company-merger-ever-2013-7#ixzz2aXPVRFPq