Eric Faulkner.
The AdNews end-of-year Perspectives, looking back at 2025 and forward to next year.
Eric Faulkner, Partner & Chairman, and Mark Leone, Partner and Managing Director, Madclarity
2025 ... the year everything changed ... forever, with the ‘HoldCo’ (international holding company) agencies.
If you worked at either IPG or Omnicom there’s a good chance that you were either looking for a job, or at least looking over your shoulder.
If you were working at Dentsu, you were wondering if you’d have to move to Tokyo to stay with the company.
If you were working at WPP you were probably wondering which brand name you’d be working under by the end of the year.
And if you were working at Publicis Media, you were struggling to look your clients in the eye.
In fact, if you worked at any of the holding company groups in 2025, you were probably struggling to look at all your clients in their eyes. 2025 was the year when all pretence of principal media was thrown out of the window.
It’s not even an open secret anymore.
Big agencies using their clients’ money to squeeze media owners for free advertising time and space ... and then selling that free space to their clients.
Meanwhile, clients are still thinking that their agency has their best interests at heart. That their agency’s media recommendations are the best for their brands and their business. Clients still don’t ask enough difficult, but important, questions.
But client attitudes have been slowly changing.
It was not that long ago that large advertisers would only consider working with one of the holdco agencies. You’ve probably heard stories about the old days, with the one token independent agency being invited to pitch. We still occasionally get asked by independent agencies, when invited, if they are that "token independent".
Over the past five years, we’ve seen the changes firsthand. Independents have won all the pitches we have run during this time. More than 40% of our ongoing clients now work with an independent agency. It is a clear sign of the increasing belief by most advertisers that independent agencies will best meet their needs.
But it was never the big clients. They were staunch in their belief that they were best served by the big holdcos. 2025 looks to be a watershed moment.
In the past week alone, two of our biggest spending clients asked us why they shouldn’t move their business from a holdco agency to an independent.
We talked at an Advertising Procurement Summit recently. Apart from a session on AI, there was a common theme from every speaker ... you would be crazy to trust almost anyone in the big agency world anymore. The most damning words came from the ex-Head of Finance of not one, but two of the holdcos. Money is being lost at many stages of the media advertising process and yet the clients’ only focus is on trying to reduce the agency fee ... worrying about the 7% and ignoring the 93%!
It’s not just us painting a dismal picture for agency networks. A few weeks ago, Mat Baxter referred to them as facing an "extinction event". A few weeks earlier, Mark Zuckerberg said that Meta will handle all an advertiser’s needs, with no need for an agency.
So, what is the answer for holdco media groups? Not a prediction, a provocation...
It looks like their current preferred solution is further cost cutting and consolidating. Along with an even greater reliance on principal media. We can only imagine what this will do to service levels for already disillusioned clients. A combination that is likely to further accelerate the decline.
Is the answer potentially more extreme? The controversial core of today’s model may become the hidden solution for tomorrow.
Do holdco media agencies of today become the media brokers of tomorrow? Mass buyers and sellers of media inventory. No strategy, planning or recommendations... and no agency fees. The model is cleaner and clearer. Advertisers will get advice elsewhere and feel less conflicted. Agencies will represent and trade on behalf of a large group of advertisers, whilst retaining the difference between purchase and sale prices as remuneration. The strength of their deals and relationships on both sides, dictates their profitability. A core competence that has existed from day one. And a potentially lucrative model.
Or will that model crumble as quickly as the current, without the media negotiation power that determines where advertiser budgets will be spent?
Maybe this really is the big international media agency Armageddon.
Mark Leone
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