Failed marriage between Publicis and Omnicom has cost both dear despite quick divorce

Vodafone moved its $1bn global media and buying contract from Omnicom to WPP in April, whilst Microsoft shifted its multi-billion dollar account from Publicis and WPP to other rivals. Danone, the food business, GSK, the pharmaceuticals giant, and Marks & Spencer, have also walked away from Publicis and Omnicom in recent week. Now, the companies reportedly have a battle on their hands to keep other major accounts, including the multi-billion-dollar advertising and media buying business for Samsung.

None of those advertisers have explicitly blamed the merger for their defection, but it is hard not to make the link. "Uncertainty over the past month could not have helped," Brian Wieser, an analyst for Pivotal Research, said in a recent note. That's one way to put it.

Sources close to Omnicom and Publicis said the two companies parted ways because of cultural differences and mounting tensions over leadership and strategy. Their respective leaders, Mr Levy and Omnicom's chairman and chief executive John Wade had agreed to work in tandem as co-chief executives for 30 months after the deal was signed.

Many in the industry raised an eyebrow at the arrangement as soon as it was announced. They are both strong-headed figures, used to running their own fiefdoms – in very different ways. They tried to work out their differences, but as time went on, the blood-letting of their clients became too high a cost for their experiment.

"The challenges created a level of uncertainty detrimental to the interests of both groups and their employees, clients and shareholders," Mr Wren and Mr Levy said in a joint statement late on Thursday evening. "We have thus jointly decided to proceed along our independent paths. We, of course, remain competitors, but maintain a great respect for one another."

It will be very interesting to see exactly where those paths go. Mr Levy and Mr Wren have engaged in friendly combat in the same industry for years – but that was before they tried to make a partnership work. For better or worse, it is a very different game now that they now know each other's weak spots.

Publicis and Omnicom are not the only ones who recognise each other's vulnerabilities. Mr Sorrell, waiting on the sidelines, has a crystal-clear understanding as well. Early this morning, he described the collapse of the Publicis – Omnicom merger as a "sorry saga", driven by egos rather than logic.

The question remains whether those egos will now let the matter go, or whether they will turn Publicis and Omnicom's once-promising "merger of equals" into a bitter divorce. But whichever way they decide to go, Sir Martin can walk away in the knowledge that WPP remains number one, and take satisfaction in the fact that what could have been a disaster for the company has turned into a resounding victory.

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