The Publicis Group, a French marketing and advertising company has announced that it is planning to takeover the Internet marketing specialist Digitas next year for $1.3 billion in cash. The step has been taken to strengthen and expanding online advertising presence of the company. The deal is undoubtedly a reflection of speed with which advertising is turning towards the online media from traditional media such as newspaper and TV.
As the online advertising is increase at a phenomenal speed, Publicis and Digitas are anticipating large advertisers will increase their online advertising spending in near future at the expense of traditional media.
Publicis already owns advertising giants such as Leo Burnett, Publicis and Saatchi & Saatchi global advertising networks, which have some online expertise. However, Publicis is of the view these expertises are not enough to comply with the growing online advertising hence in order to accelerate its effort it decided to buy Digitas.
Digitas at presents has around 2,000 employees working in its offices, including around 650 employees in its Boston based headquarters. There are imminent chances that the takeover would result in some jobs cut. However, the company is of the view that the job cuts will constitute a very small percentage as it is being anticipated that there will be 3 to 4 percent jobs cut.
The Publicis Group this year has been in the hub of acquiring advertising companies as it has already bought 11 companies this year which is now interested in new media marketing firms. The company officials are speculating that the digital advertising will start constituting 10 percent of total advertising spending by the year 2010.
