Question

What are the implications of mergers and acquisitions among advertising companies? 400 words

Answer 1

Mergers and aquisitions in any industry is a complex and risky procedure. Change in the internal and external environment is something the companies into merger have to go through. In an advertising industry it becomes a sensitive matter as it involves a client agency relationship. The merger should be such that will benefit the client as well as the company. It requires transperancy, open communication and working collaboratively for a constant growth. The relationship between client and agency can be maintained in this procedure by being open and transparent about the merger and benefits attached to it.

The consolidation can have an effect on all the areas that the company is working on and is operating alone. The media costs will be distributed which will further help in making their position in the market influential. They may get a competitive advantage when the client will be benefitted from the increase in buying power. There are conflicts that can arise too. In the competitive market where two companies were competing against each other now will be collaborating into one and working for mutual benefits. Contractual agreements will be made to protect the interests of both. But sometimes these mergers airse competitive conflicts that needs to be solved amicably. The change in the operating teams including handling acounts will effect the merger too. If not agreed on the terms if can effect the clint agency relationship adversely. The changes in the operational systems will be required whether is it an evolution or just the increase in the responsibilities partially. These changes can effect the merger as the company working for the benefits of own and the clint will now be considering another company to be benefitted as well. The culture of the workplace will be effected as well. Addition of employees and systems in the operations of the companies will have to be accepetd by the employees. The way of working, startegies used and operational structure may vary and these need to be adjusted with in the mergers. The employees would be of different race, sex, age and behaviours which will need effective communications and openess with each other.