Paramount’s new deal with global advertising agencies IPG, soon to be a part of Omnicom, and Publicis Groupe had its origins when the then aspiring owner Skydance was kicking the tyres of the media group.
During due diligence, Skydance, led by David Ellison, found that Paramount had not reviewed its media buying for some time.
And what Paramount was paying for this was far above what the Skydance team had experienced.
The result was that Paramount parted ways with WPP in June this year after more than two decades.
Publicis became lead media agency with IPG Mediabrands looking after Paramount’s streaming business.
And Paramount now also looks to both agencies to bring in more advertising dollars because they represent brands with big marketing budgets.
Paramount reportedly spends $600 million in advertising across its films, streaming and other TV. The company pulls in more than $8 billion in advertising revenue.
Skydance has, since it took control of Paramount almost 100 days ago, been working at confirming expected efficiencies across the organisation.
Ellison, the now CEO of Paramount Skydance, is confident actions taken so far, along with restructuring still to come, will achieve at least $3 billion, or about $1 billion over the original target outlined at the time of the deal announcement in 2024.
Paramount Skydance reported its September quarter results, posting revenue of $US6.7 billion, flat on last year, and forecasting $30 billion for 2026.
The streaming business, or Paramount’s direct-to-consumer segment, grew 17% but TV media revenue dropped 12% on thinner advertising.
Ellison is working on what he calls North Star priorities: investing in and growing businesses anchored by creative engines and storytelling; scaling direct-to-consumer businesses globally; and driving efficiencies.
“As anticipated, some areas have exceeded expectations, while others require additional attention and focus,” Ellison told shareholders when announcing September quarter results.
“One example is our digital advertising business, which has not yet reached the growth potential we know it can achieve, despite a significant increase in time spent, including on Pluto TV, where engagement continues to grow while lagging other FAST services in the market,” he said.
“To accelerate progress, we have partnered with IPG and Publicis across both ad sales and media buying.
“We are confident these partnerships will position us for meaningful growth as we continue to strengthen our product and refine our go-to-market strategy.”
In a briefing of market analysts, Jeff Shell, president of Paramount Skydance Corporation, said the deal with IPG and Publicis was signed before Skydance owned the company.
“One of the things we found in due diligence is that the company hadn't done the traditional media reviews in a long time of their buying relationships with the agencies,” he said
“So we worked with prior management to do a review.”
And the cost was “much in excess of what I have seen” from his previous roles and generally in the market.
“So the initial objective was to try to use this review to lower the cost of buying marketing for our various marketing entities, most notably our streaming and our film divisions, which are the two largest buyers of advertising,” he said.
“Once we got into the process, we realised that the opportunity was significantly bigger than that.
“And we met with all the top holding companies multiple times, us and previous management, and we ended up doing two deals with the two largest agencies, Publicis and IPG.
“And the relationships, the deals that we did were much broader than just buying. On the buying side, we're going to get significant savings in the cost of buying marketing across the company in addition to a lot of more benefits in going with the two largest buyers.
“These holding companies are not just buyers of advertisers, but represent all of our sales clients.
“And as part of the deal, we got significant revenue commitments over three years with both Publicis and IPG.
“As you can imagine, part of the nuance of this was what's incremental. We didn't just want to get advertising buys that we're just replacing current advertising.
“So we expect to see most of this advertising in the digital area where we need it the most, and that you should see that in our numbers over the next couple of years.
"But more broadly, we're now partnered on a broad basis with the two biggest agencies as the world transitions from linear to digital.”
Part of the restructure of advertising was to bring in a new head of advertising, Jay Askinasii, who ran ad sales at streaming platform Roku. Before that was the head of digital for Publicis.
The new owner of Paramount has been flattening the company structure, getting rid about one quarter of its senior vice presidents and above, streamlining “decision-making and reducing the friction that can prevent great ideas from advancing”.
Paramount has also started a phased return-to-office plan beginning in January 2026.
Under this plan, employees will transition to being in the office five days a week.
In Los Angeles and New York, employees at vice president and below were offered the option of a voluntary severance package if they are unable or unwilling to return to the office full time. About 600 employees chose this option.
Emarketer senior director Jeremy Goldman said Paramount Skydance’s first full quarter as a merged company felt less like a premiere and more like a rewrite in progress.
“The numbers landed roughly where investors expected, but that’s almost beside the point—the company is deep in transformation mode,” he said.
“David Ellison’s first few months at the helm have been about rewiring, not refining: slimming down operations, folding in Skydance’s efficiency playbook, and redirecting resources into scalable IP and smarter distribution.
“The tone was refreshingly unsentimental. This isn’t about nostalgia for Hollywood’s past; it’s about proving a legacy studio can move with tech-company speed.
“Ellison is pairing consolidation with investment, betting that a smaller, sharper Paramount can grow faster than its sprawling predecessor.
“That urgency is timely. With Warner Bros. Discovery reportedly weighing its future and fielding takeover interest, the industry’s next wave of consolidation is already rolling in. Paramount’s posture—as an active consolidator rather than a target—positions it to shape, not just survive, that shakeout.
“We forecast Paramount+ to reach $566.7 million in ad revenues next year in addition to its $3.42 billion in subscription revenues, but a WBD deal could supercharge both of those figures.
“Investors can also cheer the company promising to hit DTC profitability in 2025; after years of “almost there,” that’s the clearest sign yet that Paramount+ is moving from passion project to profit centre.
“In short: Paramount Skydance isn’t settling into a merger; it’s sprinting through one. The studio is reinventing itself mid-air, and for now, the parachute isn’t just holding—it’s catching a little wind.”
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.