The Impact of Holding Company Mergers on Advertising Industry

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Advertising,Holding Companies,Mergers

This article discusses the potential impact of mergers between large advertising holding companies on the industry. It explains what holding companies are, how they have evolved over time, and the consequences of mergers on employees and agencies.

This month, two of the largest advertising holding companies announced a merger. Many creatives ignore such news bites, even creatives in advertising. They do so at their own peril because at some point it will impact their lives and livelihoods. To grasp the impact you first have to understand what an advertising holding company is. 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 theFor 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.I’ve been at many large NYC shops during mergers and restructuring. When Jerry Della Femina (who “Mad Men” was based on) sold his shop to a holding company. At Bates Worldwide, when it was dismantled by WPP and “sold for parts” to rival agencies. And I was at Foote, Cone & Belding (FCB) as IPG merged it with Draft Worldwide.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. But what happens when it’s not agencies, but instead massive holding companies merging? Truthfully, I don’t know. I have never lived through that. Few of us have. But we can take some guesses.As mentioned, WPP is the largest holding company. They employ over 120,000 peopl

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