The great media agency shake-up
There is big change on the horizon for the media agency landscape. Here are six key trends to watch.
Let me state the obvious: the advertising agency landscape is going through a seismic upheaval right now.
Whether it be through mergers, account losses, changes in how and where we work, an indie uprising, technological advances or a combination of all of the above — we are entering a brave new world.
The long-term business decisions taken pre-Covid-19 are now paying off. The most notable example is Publicis Groupe’s strategic choice to invest in data ownership six years ago via Epsilon. It’s cleaning up in the pitch wars — most recently winning Coca-Cola’s North America media account.
It’s not yet clear how rivals plan to respond. The reaction from Omnicom and Interpublic is to merge, betting that the traditional power of media scale will help them compete better, while WPP has just purchased InfoSum, designed to strengthen its AI-led data offer and allow clients to maximise the value of their first-party data.
But it’s not just about top-level movements. What’s happening now will affect everyone in the business, from the CEO down to the newest entry-level starter recruit.
Here are my six predicted trends.
Rise of AI
AI is quickly taking over the more routine elements of our media craft, helping manage planning and buying more seamlessly in a programmatic world and creating more bespoke content.
Agencies that are using AI in the smartest way are those that give their people back time to do the stuff only humans can do, whether it’s assessing campaign concepts, providing a first draft of briefs or speeding up the process of creating content.
The potential of AI to transform the way agencies work is perhaps best seen at The Brandtech Group and the work that it is doing with Pencil. New skills such as AI prompting are becoming part of the job description across the agency landscape.
Fewer people
Thanks to technology, there’ll be less need for people in our business at both the bottom and the top.
We’re already seeing that with senior executives leaving and not being replaced across the holding companies. There are big global agency brands that no longer have CEOs or chief operating officers.
Leadership is being moved up to holding company level, while enforced return-to-office mandates are being used as a method to cut junior staff numbers in analytics, design and production teams — all areas where new technology and even media owners themselves are replacing rote tasks.
Client and strategy teams remain and will become more critical. The truth is that we’ll end up with smaller staff numbers at agencies as we negate the need for repetitive tasks.
End of holdco agency brands
The rise of Publicis Media, GroupM and Omnicom Media Group means that, for big clients at least, agency brands are mostly a thing of the past.
With agency teams already being located in the same buildings, it’s only a small step before they cease to exist, except as a fig leaf to manage conflict where chief marketing officers can’t be convinced by other processes.
We are moving towards an operating model where the right mix of service model, technology and data infrastructure trumps brand name. This represents a huge opportunity for independent agencies to win business off the back of their “client love” and unique view of the world.
Bespoke teams
We’ve already seen examples of this, such as WPP’s OpenX for Coca-Cola and Omnicom Media Group’s MAL for Apple, but it will happen more often and for smaller clients, with holding companies combining the expertise that matches the brief.
Without internal agency brand competition and multiple P&Ls to satisfy, bespoke teams will become easier to create and operate, driven by country-based P&L structures.
The impact is already apparent in the billings data. Publicis Media may be winning left, right and centre, but its agency brands aren’t growing at the corresponding rate.
In-housing back on the agenda
In-housing is gaining new momentum, built around the new possibilities of technology that allow brand teams and hybrid “agency-in-house” to deliver on the promise of being closer to the brand and faster to respond.
The strategic benefit of being closer to proprietary data is also a powerful driver pushing brands down this path. There are plenty of media leaders looking for new roles, so expect some of them to pop up in-house at some stage, with a focus on process and governance.
New competitors
In a world where media scale is no longer the only way to secure better value and many technology tools are available to everyone, all but the biggest global brands will now look further afield for their agency partners.
Technology has blurred the boundaries between agency and consultancy, as well as media and creative. Accenture is a big player now and others will follow the same path.
Companies with experience of managing IT transformations and strong links to the C-suite can compete because every new website has a communications component.
Time for a revolution
The industry is on the brink of a revolution. Media is now the heartbeat of marketing, driving both efficiency and innovation.
As AI reshapes workflows and tech blurs the lines between agencies, consultancies and in-house teams, we are entering a new era of advertising. It’s one where agility, data mastery and human creativity will separate the winners from the rest.
For clients and agencies alike, everything’s in play — and those willing to make the boldest changes will thrive.