When the world's second and third-largest ad groups announced a merger last July, it sparked talk from rivals, led by Martin Sorrell, the boss of current leader London-based WPP, that the U.S. and French firms could lose clients and talented staff as a result.

Now, with the deal’s closing delayed at least six months because of regulatory issues, and relations so tense between the two that they haven’t been able to solve a seven-month dispute over who becomes new finance chief, Sorrell has been boasting about being successful in winning business from them and poaching their staff.

Several large contracts, including Vodafone's $1 billion global media and buying account, moved hands from Omnicom to WPP in April.

On Wednesday, Microsoft announced it was moving its multibillion-dollar ad and media business from Publicis and WPP to Japan's Dentsu Aegis and U.S. Interpublic. Others to move away from Publicis or Omnicom in recent weeks include food maker Danone, pharma group GSK, electronics firm Sony, and retailer Marks & Spencer.

In the ad business, accounts do change hands quite regularly - in the case of some companies every few years - and there are often reviews and pitches for the business when contracts come to the end of their terms. Also, none of the clients who have jumped ship have publicly blamed the merger.

Omnicom CFO Randall Weisenburger noted on an earnings call last week that swings in the business, such as the Vodafone loss, are quite normal. “Each quarter you get one or two big wins or one or two big losses," he said.

And the wins are not all in WPP's favour. Publicis prevailed against WPP on a contract with food company ConAgra in February and its BBH agency expanded its role with British Airways at the expense of WPP's Ogilvy in March.

Nevertheless Publicis and Omnicom face the unenviable task of defending contracts, including the multibillion dollar account of tech giant Samsung and the U.S. account of the leading brewer Anheuser-Busch InBev, maker of Budweiser beer, amid questions about whether the merger plan will fall apart.

Among any client’s biggest concerns will be whether they get the attention and quality of service they want from staff and management who will be wondering if the merger will happen and what lies ahead for them whether it goes ahead or not. Critical is whether there will be changes in the ad agency teams they work with, consultants, analysts, and rival ad executives said.

"There is more than $4 billion in review for the combined company counting major accounts like Samsung that could change hands," Pivotal Research analyst Brian Wieser said.

"Publicis and Omnicom lost contracts worth $1.5 billion from four accounts in one week in April," he said. "It's somewhat bad luck on timing, but does raise some questions as to if it's more than bad luck."

CHAMPAGNE TOASTS

As they feted the deal signing with champagne in Paris last summer, Omnicom CEO 's John Wren and Publicis' CEO Maurice Levy said their "merger of equals" would enable them to better compete with the likes of Google and Facebook who dominate the digital ad space, which accounts for nearly a quarter of global marketing spend.

Greater scale was supposed to give the new group better bargaining power in buying space for ads on TV, the web, and print at a time when many global brands are looking to cut costs on advertising.

But uncertainty over the deal grew last week after the two CEOs gave different reasons for the closing's delay.

The deal still requires various regulatory approvals, including antitrust approval in China, and agreement from European authorities to a structure that would see the merged company have its domicile in the Netherlands and tax residency in the UK.

The two sides are also locked in a dispute over who should be chief financial officer. Whoever takes the CFO role will determine how the new company will operate, hewing either to Publicis' centralized structure or Omnicom's less controlling approach to subsidiaries. [ID:nL6N0NJ155]

Still, some experts said that the merger of the two holding companies wasn’t a big issue for many clients.

Judy Neer, president and CEO of Pile and Company, a consulting firm that helps companies with their marketing relationships, said many of her clients weren't concerned about the merger provided it didn't impact the specific ad agency subsidiaries they deal with.

One insider at Omnicom acknowledged that the deal had not been useful as a tool to recruit clients, but nor were clients citing it as a reason for reviewing contracts either.

A person familiar with the thinking of one big consumer brand which recently moved its global account from Publicis to WPP said it had not been put off by the merger, but that WPP had offered more attractive and efficient terms.

Another person at a multinational which recently moved its media buying account from Omnicom to WPP, said Omnicom had in recent months failed to maintain the relationship, that WPP was better in certain areas including digital, and that the company couldn’t see the benefits to the Omnicom-Publicis merger.

"No one explained what synergies were in it for us," the person said.

POACHING TALENT

One of the biggest accounts to come up for grabs in recent years is the creative, digital and media business of Samsung Electronics. Starcom MediaVest Group and Leo Burnett, units of Publicis, currently have much of the work with other agencies doing parts.

According to Ad Age, Samsung spent $4.35 billion on advertising in 2012. Exane BNP analyst Charles Bedouelle said the account could be worth around 2 percent of Publicis revenues and said the review indicates how big companies are consolidating their work across countries and sectors as they look to save on costs. "WPP excels at this game," he said citing the firm’s size and structure.

Other battlegrounds expected include Spain's Telefonica, which is reviewing some $300 million in advertising contracts, most of which are now with Publicis.

WPP had the highest rate of comparable revenue growth of the big four agencies in the first quarter, with the fourth-largest IPG in second place, Omnicom third and Publicis fourth.

Retaining talent is also a worry for Publicis and Omnicom.

WPP's Sorrell has said that for every one member of staff he has lost to the merging group, his firm has attracted four in return. Both IPG boss Michael Roth and Yannick Bollore, head of the fifth-biggest ad group Havas, said they had seen opportunities to lure staff away from the two. Havas recently won an account from Gulf airline Emirates from Publicis.

"Six months ago or four months ago, I was receiving resumes from young executives," Bollore told an analyst conference call on March 20. "Now for the last two or three weeks, I don't know if something happened inside Publicis-Omnicom, but I'm starting to receive some resumes from very high senior managers."

Still Omnicom's Wren said on the firm's earnings call last week that its talent base is “very stable” and pointed to a recent big hire: Peter Sherman, Omnicom’s new executive vice president, who left WPP'S JWT Worldwide.

(Editing by Martin Howell)

By Kate Holton, Jennifer Saba and Leila Abboud