Monday Briefing: The Biggest Agency Breakup Since IPG

Good morning, it's James here. Omnicom just told Wall Street it plans to shed $3.2 billion worth of businesses and cut $1.5 billion in costs. If your agency relationship involves anyone in that portfolio, your phone should be ringing this week.

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The Lead: Omnicom Is Gutting Itself to Build Something New

Two months after closing its acquisition of Interpublic Group, Omnicom is already reshaping the combined entity with a chainsaw, not a scalpel.

What happened: On its Q4 earnings call last Tuesday, Omnicom doubled its cost-savings target from $750 million to $1.5 billion, with $900 million expected this year alone. The savings breakdown: $1 billion from labor reductions (read: “layoffs and offshoring”), $240 million from real estate, and $260 million from operational efficiencies. CEO John Wren also confirmed plans to exit smaller markets generating $700 million in revenue and sell "non-strategic or underperforming" businesses worth $2.5 billion (Ad Age).

Why CMOs should care: This isn't just an agency story. It's a client story. If you work with any agency under the Omnicom-IPG umbrella, expect talent turnover, team restructuring, and potentially losing the people who actually know your business. The promise of consolidation is always "better, faster, cheaper." The reality is usually twelve months of internal chaos before anyone sees benefits.

The take: Omnicom is betting that AI and automation can replace what thousands of agency employees used to do. They might be right eventually, but the transition won't be seamless. CMOs who depend heavily on holding company agencies should be having honest conversations with their teams right now about continuity plans. The ones who diversified their agency relationships years ago are sleeping better this week. If you haven’t yet, PCG is ready to help.

What I'm Watching

Buried in Airbnb's Q4 earnings call, CEO Brian Chesky dropped a stat that should make every performance marketer pay attention: traffic from AI chatbot platforms converts at a higher rate than traffic from Google (Marketing Week).

Think about that. The company that built its growth engine on SEO and paid search is now saying AI chat referrals are better.

Chesky called chatbot platforms "really good top-of-funnel discoveries" and described Airbnb's vision: "The app doesn't just search for you. It knows you." They've already built a custom AI agent that resolves a third of support tickets without human involvement.

What to watch: Whether this is an Airbnb-specific finding (high-intent travel queries convert well from AI recommendations) or an early signal that AI referral traffic broadly outperforms search. If other companies start reporting similar numbers, the implications for media mix modeling are enormous.

The Cautionary Tale

Liquid Death aired an AI-generated commercial during Peacock's Winter Olympics coverage. A figure skater promoting sparkling water transforms into a red-eyed demon warning that AI will "spell the end of humanity." Weird enough. Then the brand did something weirder in today’s age. They never posted it online (Ad Age).

The result was exactly what you'd expect from the internet. One Reddit user described the experience as "like a fever dream." An X post calling it "AI slop" generated 4.5 million views. A Liquid Death spokesperson said they "thought it'd be funny if people saw the ad but couldn't find it on our socials."

The lesson: There's a razor-thin line between provocative and confusing. Liquid Death has built a brand on subverting expectations, and the intentional mystery created real conversation. But the 4.5 million "AI slop" impressions suggest a growing chunk of the audience has zero patience for AI-generated creative, no matter how clever the meta-commentary. If your brand is considering AI-generated ads, know that "made by AI" is becoming a credibility signal in the same way "stock photo" was a decade ago. The medium is the message, and right now, the AI medium says "we didn't care enough to make this ourselves."

The Reading List

• "More Impact, Less Waste": Coca-Cola CFO Praises Marketing Transformation — Coke's CFO tells CAGNY that the marketing overhaul is working. The real story: they're planning city-by-city personalization for the World Cup using AI. (Marketing Week)

• Brand Marketing Will Be the Priority in 2026 — After 2025 revenue shortfalls, Digiday research shows marketers are shifting budgets back to brand building as priority number one. The performance-only era is officially over. (Digiday)

• 10 AI Marketing Trends for 2026 — Adweek's deep dive on Generative Engine Optimization (GEO), the new discipline emerging alongside SEO. If you're not optimizing for AI citations yet, you're already behind. (Adweek)

One More Thing

The agency world is restructuring. AI is rewriting the rules of search. Brands are rediscovering that you can't performance-market your way to long-term growth. Every week, the same lesson keeps showing up wearing a different outfit: the companies that invested in things they own, things that compound, things that don't depend on a single platform or partner, are the ones with options.

Everyone else is scrambling.

See you next Monday.

—James