It’s the biggest ad deal since Sterling Cooper Draper Pryce, but the competitive landscape facing Madison Avenue men back in the day wasn’t dominated by IBM or any other giant technology company.

On Monday, advertising giant Omnicom Group announced its intention to buy ad firm Interpublic Group in a $13.25 billion all-stock deal. The transaction, if completed, will create the world’s largest advertising firm — that is, if you don’t count Big Tech players like Google and Amazon, which have been eating up more and more of the advertising industry’s market share.

Bigger and Bigger

The advertising industry, despite a few fallow years of high inflation rates cutting into companies’ marketing budgets, continues to grow. Advertising agency GroupM said in a report released Monday that 2024 will see the advertising industry top $1 trillion in total revenue this year, and that’s even stripping out political advertising in the US. Looking ahead to next year, GroupM said it expected the big winners to be US tech firms that sell advertising, rather than traditional ad agencies.

Omnicom’s absorption of Interpublic would buttress it against the relentless onslaught of Big Tech by making itself as big as possible:

• If enacted, the deal would mean Omnicom would have more than 100,000 employees and command roughly $25 billion in annual revenue, per The New York Times.
• That would make it the largest agency in the business, but it would still pale in comparison with Silicon Valley giants’ ad divisions. Google’s advertising business pulled in $238 billion in 2023, Meta’s made $132 billion, and Amazon’s notched a humbling $47 billion.

Big Fish in a Big Pond: Big Tech’s enormousness puts the Omnicom deal in an unusual situation, creating a firm that would be simultaneously the biggest of its kind and yet dwarfed in its sector. Omnicom CEO John Wren played that to the company’s advantage in a call with analysts. “We are pretty confident this is not going to create any regulatory issues. The world isn’t divided into four companies — you have things like Google, Facebook, Amazon […] servicing people’s marketing needs,” Wren said, per Reuters’ reporting.

Is Silicon Valley big enough for two hype-cycles at once?

On Monday, Google announced that it had made a significant breakthrough in the realm of quantum computing. Like the rollicking world of artificial intelligence, quantum computing is potentially revolutionary technology that could, among other things, end classical computing as we know it.

Ones and 24 Zeroes

Quantum computing essentially takes the ones-and-zeroes binary math that powers traditional computing and replaces it with a system based on the laws of physics in which bits can represent both ones and zeroes simultaneously. The upside? “Think of a road that has cars that can go one direction or the other, and all of a sudden, you can have cars go in any direction at the same time, instantaneously,” Karl Holmqvist, Founder and CEO of cybersecurity firm Lastwall, recently told The Daily Upside in our timely deep dive into the state of the quantum race.

The issue with quantum computing? It is relatively unstable — the vastness of a non-binary computing system can make it prone to crippling errors, and the physical hardware must be stored at temperatures hundreds of degrees below freezing. On Monday, Google unveiled a new quantum chip called Willow, which it says clears fundamental roadblocks in quantum computing and is capable of awesome computing power:

• In a research paper published Monday in the peer-reviewed journal Nature, Google said it had found that increasing the array of quantum bits exponentially decreases the system’s error rate.
• The achievement is seen as a major breakthrough in quantum computing. Google says it means Willow can perform calculations in five minutes that would take the world’s best supercomputers 10 septillion years (septillion is a one with 24 zeros after it) to calculate. We had to look it up, too.

In Theory: The breakthrough is a longtime coming. “This was theoretically proposed back in the 90s,” William Oliver, a physics professor at Massachusetts Institute of Technology, told the Financial Times. “We’ve been waiting for this result for many years.” It’s not the only recent big advancement in the space. On Friday, researchers from Oxford University and Osaka University in Japan published a paper showcasing quantum computing that can be done at room temperature, rather than extreme-levels of cold.

Vanguard, the $10 trillion asset management juggernaut, invented the index fund, but lately it’s trying to reinvent itself. 

On Monday, the firm said it will move its $900 billion wealth management business into its own division, marking the biggest restructuring at the world’s second-largest money manager in more than ten years.

Making His Mark

CEO Salim Ramji only joined Vanguard from BlackRock, the world’s largest asset manager, in July, but he has acted swiftly to remake the company and its strategy in line with his vision, moving the firm more like a speedboat than an ocean-liner sized giant with a staff of 20,000.

To that end: Vanguard has long offered wealth management services, and launched a digital advisory in 2015 that opened up services to anyone willing to make a $50,000 investment. In the years that followed, that figure crept down to $3,000. But under Ramji, the Vanguard Digital Advisor entry level was lowered all the way to $100 to open it up to a potentially massive new base of customers with less money to invest — with the Digital Advisor fee of about 0.15% maintaining the firm’s hallmark low costs. (Vanguard’s low fees are a product of its unique ownership structure: The company is owned by its funds, and the funds are owned by the investors in the funds, meaning it has no outside shareholders).

Monday’s announcement also came with a major appointment:

• To run the new division, Ramji tapped Joanna Rotenberg, a former Fidelity Investments executive who oversaw the split of its in-house wealth unit from its brokerage and then ran the wealth unit. The number of retail accounts at Fidelity rose from 30 million to 38 million during her two-year tenure.
• Part of her task at Vanguard will be to keep the asset manager competitive in a diversifying wealth management field, which has seen banks and fintechs expand their offerings and AI advances that make the “robo-advisers” of 2010 look like abacuses — PitchBook analysts predict wealthtech will be a more than $2 trillion market by 2027. 

New Year, New Vanguard: Again, Ramji works fast: The restructuring takes effect in January. In addition to Rotenberg’s appointment, Vanguard said John James, current head of the Institutional Investor Group, has been named head of Workplace & Advisor Solutions.