Company mergers and bolt on acquisitions can retain clients, increase revenue and open new markets, but client conflicts, job cuts and slowed progression remain risks, according to industry experts.
The year has been dominated by news of mergers and acquisitions among the big players an industry experts say the trend will continue.
Omnicom and IPG, announcing a merger in December 2024, will, after regulator approvals and a $127.4 million spent on severance pay, are due to formally become one later this month.
And more changes flowed. Omnicom's Clemenger BBDO absorbed CHEP Network and Traffik in late February 2025.
The DDB brand, according to widespread but unconfirmed reports, will also be retired when Omnicom and IPG combine.
Media group Seven West Media and broadcaster SCA confirmed a merger in late September, creating an entity with combined revenue of $1.777 billion and a market capitalisation of $417 million.
MFA CEO Sophie Madden told AdNews that rapid technological change is driving the shift.
“As businesses decide how to transform, M&A has become a fast path to new capabilities,” Madden said.
“In our sector, agency mergers reflect the same forces. As client needs evolve and technology reshapes growth, agencies are broadening capability, expanding services and building scale.
“Rather than signalling instability, it shows an industry proactively adapting to compete in a rapidly changing economy.”
Global M&A activity hit US$1.94 trillion in the first nine months of 2025, up 10% year on year, according to Boston Consulting Group.
SI Global director Julia Vargiu said the industry is in the middle of the first mergers and acquisitions wave, with the next one to be “faster, more strategic and disruptive".
“Over the past three to five years, we’ve seen a global consolidation trend unfold in earnest. But the structural pressures driving these deals haven’t eased, they’ve intensified.
"Brands, particularly global ones, are tired of fragmented ecosystems…creative over here, media over there, tech and data somewhere else. Juggling multiple agencies is expensive and inefficient. What clients are asking for now is one partner who can deliver it all.
“Mergers like Clemenger folding CHEP and Traffik into a full-service offering, or WPP repositioning GroupM into WPP Media, are textbook responses to this demand for integration.
“What’s happening isn’t just about streamlining. It’s about survival in a market where the old agency model no longer cuts it.”
With AI invading the traditional agency model, clients are expecting wider remit capabilities on smaller budgets and shorter contracts.
Vargiu said each wave of M&A has reduced the value of legacy creative networks that haven’t evolved fast enough.
“Meanwhile, technology and infrastructure are the new battleground. AI, data-driven marketing and automation have created an arms race," she said.
“To deploy these capabilities at scale, agencies need a unified data spine, integrated platforms and serious tech talent. That infrastructure is expensive. Mergers become the fastest path to build or buy it.
“In parallel, media scale still matters. With platforms like Google, Meta, Amazon and TikTok now controlling the lion’s share of ad spend, legacy media groups are fighting to remain relevant.
“The SCA and Seven West merger isn’t just a local story, it signals how traditional players are consolidating to compete with tech giants.”
SQUAD M&A CEO & commercial partner Virginia Hyland said there are three forces driving today’s surge in merges: private equity acceleration, capability gaps across global networks and independents and the need for integrated, end-to-end solutions.
“Private Equity (PE) firms have shifted their attention to the marketing services sector because it delivers dependable cashflow, diversified revenue and strong scalability.
“They’re actively building roll-ups and platforms to unlock efficiencies and accelerate growth.
“Global holding groups and fast-growing independents are aggressively acquiring to plug holes in their capability stack, AI, data, commerce, CX, performance media, influencer, social content, retail media, and measurement are at the top of the list.
“Clients also want fewer partners who can deliver more.
“Acquisitions allow groups to offer connected services at speed, which puts pressure on agencies to scale through M&A rather than organic growth alone.
“Consolidation as a strategic weapon, PE wants platform growth, globals want competitive edge, independents want scale and speed.”
The benefits of merging can range from client retention, cross-sell potential, investment power, talent deployment, immediate revenue and margin expansion, financial security, opportunity into new markets and access to global clients, according to both Hyland and Vargiu.
“Consolidation can create stronger offers, deeper partnerships and operational leverage," Vargiu said.
“It’s the theory behind Omnicom’s acquisition of IPG. Not just doubling scale, but repositioning the group for a world where data, platform and global delivery are table stakes."
Merging, however, can also lead to cultural friction, loss of specialisation and talent attribution, client conflicts and stalling innovation.
“Misaligned values, leadership styles or ways of working can unravel a deal quickly. It’s the biggest reason integrations fail,” Hyland said.
“Founders may struggle with new governance structures, reporting lines or decision-making frameworks, especially with PE or large global groups.
“Merging teams, processes, trading, finance systems, tech stacks and client workflows can take time and disrupt momentum if poorly planned. Many are stressed when there is role mismatch.
“High performers may leave if the transition feels unclear, slow, or overly corporate.
“Some acquirers, particularly PE firms or global groups under pressure, can expect rapid efficiency gains that aren’t immediately realistic.
“This often creates an imbalance, with financial targets overshadowing the equally critical foundations of human connection, client satisfaction and talent recognition.”
M+C Saatchi recently rejected an offer from marketing and advertising technology firm Brave Bison to buy its performance division for £50 million.
Shares in Brave Bison, which is backed by investors Rupert Murdoch and former Conservative Party deputy treasurer Lord Ashcroft, have almost doubled in the year to date, while M&C Saatchi's has fallen by 22%, according to Sky News.
While M+C Saatchi board of directors said the offer “fundamentally undervalues the division”, Vargiu said it is apparent that "big, merged agencies can become bureaucratic, cautious and risk-averse, just when the market demands courage and speed."
“This is particularly risky in markets like Australia, where local nuance still matters and talent is highly mobile," she said.
“If your clients or your best people feel like your new structure doesn’t serve them, they won’t wait around.
“Holding onto a high-growth division may preserve future value, but it also raises questions about whether the parent group can deliver on that potential alone.
“Carve-outs aren’t always predatory. Sometimes, they’re a warning shot.”
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.