Understanding Advertising Holding Companies
Many people’s vision of an ad agency is stuck in 1965. We can blame TV shows like Mad Men for this vision of Madison Avenue creatives working shoulder-to-shoulder late into the night, to make their clients millions. Those days are long gone (even though they produced some of the best ads ever). It’s all far more corporate and data-driven today.
The Rise of Holding Companies
For decades, large agencies have been swallowing up small ones. Then both large and small shops were acquired by what are known as “holding companies”. These are massive companies that now own all advertising across the globe. The “Big Six” of holding companies are Omnicom, Interpublic Group (IPG), Publicis, Dentsu, Havas and WPP, which is currently the largest.
The Results of Mergers
When ad agencies merge, the result is always redundancy. Employees hope nobody will realize there are 12 of you in a department when 3 would suffice. Sitting quietly at your desk with your head down is no protection from that pink slip. During a merger, thousands of square feet of office space are returned to landlords. Both jobs and entire departments are let go.
Big Kid on the Block
As mentioned, WPP is the largest holding company. They employ over 120,000 people. By comparison, the two companies that will merge, Omnicom and IPG, employ 76,000 and just under 60,000 people, respectively. So prior to any redundancy firings, the merged company, that will operate under the Omnicom name, will have around 136,000 employees. This surpasses WPP, making them the new big kid on the block.
Technology and the Future of Advertising
This was to be expected. But of course, it goes beyond traditional layoffs. We are in an age where our jobs are now, in real-time, being replaced by computer technology. Yes, now is the day when white-collar workers are feeling the sting of technology that blue-collar factory workers felt 50 years ago, when machines took over the assembly lines.
A New Era for Creatives
There was a day when agencies would, much like sports teams still do today, pay numbingly high salaries to the top talent. The future of advertising appears to be lean and mean, and the big dollars are going to the best technologies. No longer the best creatives.
Conclusion
The future of advertising is clear: technology is the direction and emphasis is on innovation. The days of high-paying jobs for top talent are behind us. The future of advertising is lean and mean, and the big dollars are going to the best technologies. For ad inspiration from the Mad Men era, see our list of the best 1950s ads.
FAQs
Q: What is an advertising holding company?
A: An advertising holding company is a massive company that owns all advertising across the globe.
Q: Who are the “Big Six” of holding companies?
A: The “Big Six” of holding companies are Omnicom, Interpublic Group (IPG), Publicis, Dentsu, Havas, and WPP.
Q: What is the result of ad agency mergers?
A: The result of ad agency mergers is always redundancy, with thousands of square feet of office space returned to landlords and both jobs and entire departments let go.
Q: What is the future of the creative industry in advertising?
A: The future of the creative industry in advertising is lean and mean, with the big dollars going to the best technologies, not the best creatives.
