By Michael Bürgi • December 2, 2024 •
Ivy Liu
This Media Buying Briefing covers the latest in agency news and media buying for Digiday+ members and is distributed over email every Monday at 10 a.m. ET. More from the series →
As we slide into the last month of 2024 and the beginning of the end of the fiscal fourth quarter, it appears the haves of the agency holding company world will continue to have, and the have-nots will do their best to stiff-upper-lip it, with hopes to change their trajectories for the better in 2025.
In many ways, the holding companies are not unlike sports teams — when you have momentum and mojo from winning a few pitches in a row, it feeds a confidence to win even more. And today, Publicis and Omnicom are the Cleveland Cavaliers and Detroit Lions of the agency world. (What’s going on with this Midwest mojo?) Seemingly they’re unstoppable — for now.
“Momentum is a powerful thing in agencies,” said Ryan Kangisser, chief strategy officer at consultancy MediaSense. “And you know when you’re winning big global accounts, it gives you more confidence going into the next pitch.”
On the flip side, a slumping holding company walks into new business pitches knowing it trained really hard to win — but those execs can’t get that nagging feeling out of the backs of their minds about the three or four pitches they just lost, and whether that will happen again. One has to imagine IPG or Havas Media Network feeling that way, having lost long-time clients and missed out on winning several new ones.
As in the sports world, there’s the rest of the holdcos winning a few games but never really putting together a hot streak — WPP and Dentsu tend to fit that middle. They’re fighting for market share alongside the scrappy up-and-comers like Stagwell or Brandtech Group.
Finally, there’s S4 Capital and Monks, which is unfortunately so moribund it’s got agencies leaving its ranks — recent reports indicate that Cashmere, one of the many agencies S4 acquired through its cash and stock swap, has pulled out of the company by essentially dissolving its top management. And the holdco is forecasting negative growth for the full year.
Could 2024 have been a better year for the holdcos? Certainly, according to Jay Pattisall, vp and senior agency analyst at Forrester. “When you look at the the entire category. It’s clear that the inflationary environment globally — and particularly the media inflation — had a bit of an impact on the overall progress and performance,” said Pattisall. “You see some good growth from particular companies. But as a whole, you can see the impact of programs being put on hold, the reallocation of budgets to different areas of the marketing mix, and in some instances, some cutbacks in in media dollars based upon budgeting and corporate profitability.”
The numbers tell part of the story
The most recent COMvergence numbers largely support the narrative above. First off, some $29 billion in media spend changed hands through Q3 of this year, a 26% surge over the nine months of 2023. Pitches and account moves in the U.S. alone made up a third of that value.
According to COMvergence, Omnicom Media Group (OMG) led all holdcos with a total new business value of $7.4 billion (of which $4 billion is existing business), thanks largely to landing huge chunks of Amazon business in the Americas (+$1 billion). In the meantime, Publicis Media, according to COMvergence, secured the most incremental billings, at $4.8 billion. Meanwhile, WPP’s GroupM retained ($3 billion), and Dentsu secured new business adding up to $430 million.
Business retention is a big deal, and here’s where the narrative takes a few turns away from a straight line. According to COMvergence’s slide looking at the holdcos’ media groups, Omnicom Media Group (especially its PHD network) retained 85% of its business; GroupM held onto half; Havas Media Network 45%; Dentsu 36%; Publicis 29%; and IPG’s Mediabrands at a paltry 12% (of almost $4.2 billion reviewed, it held onto just under $500 million).
Things to look out for
As leaders, Omnicom and Publicis still have some issues to sort out. For one, Publicis has two major acquisitions it needs to absorb in Mars United Commerce and Influential, while Omnicom continues to fit Flywheel into its offerings. They’re also leaders, which puts targets on their backs.
GroupM, under new leadership in Brian Lesser, seems poised to make a comeback if it can stop the client losses. “Many strides have been made at GroupM, including the technology strategy, and changes in leadership,” said Pattisall.
And as his recent Forrester Wave report indicated, Pattisall also believes Dentsu could experience a turnaround in its modest fortunes, and pointed to its defense of General Motors as well as a string of creative wins this year. “While the the financials may not necessarily bear out the shape that they’re in, the assessment that we did shows them to be in pretty strong shape strategically,” he said.
Given its imminent spinoff from parent company Vivendi, Havas might have the most interesting, or, at least, different near-term future. But even its forecast for the future is decidedly unimpressive. CEO Yannick Bolloré, in a Capital Markets Day presentation on Nov. 19, said he expects organic revenue to be flat for this fiscal year, and to grow just 2% in 2025. Where it once was the darling of innovation in the 2010s with its “village” approach to getting media and creative agencies to work side by side, that approach never reached the scale in terms of attracting huge wins. Is it possible the spinoff is a means to put the agency group in play to merge with another up-and-comer?
As one observer, who declined to speak for attribution, quipped, “I can tell you the last five people these [agency groups] have hired, but I can’t tell you the last five clients they won.”
And indeed the three principal second-tier holding companies — Stagwell, Brandtech Group and S4’s Monks — are at that level because they haven’t won a trophy or a superstar client yet (to keep the sports analogy running). “These three are struggling to have that marquee client really propel them to that next level,” said the observer.
What will 2025 hold? Although I will explore that topic more deeply at the end of this year, it’s safe to say finding the right monetization of generative AI in the day-to-day workings of the agency world is priority No. 1.
As Pattisall summed up: “These commercial propositions are fundamental to the health and future of the holding companies, and all the companies that have invested in emerging technology.”
Color by numbers
How much will the global market for ad spend grow in the coming year? In its latest “Global Advertising Spend Outlook 2024/25,” WARC crunched ad spend data from 100 markets and projects 10.7% growth this year to reach a total of $1.08 trillion — the first time it’s hit the trillion mark.
Here are some salient stats from WARC’s report:
- Google takes in more than one-fifth of all ad dollars (22.1%) outside of China, which puts the Department of Justice ruling on the tech giant into perspective — it threatens $32.9 billion of potential growth over the next two years.
- Advertisers are due to spend $299 billion this holiday season, with online platforms such as Amazon ($16.9 billion in holiday-season ad revenue) set to rake in the lion’s share of spend.
- Globally, retail media is forecast to rise 16.4% in Q4 2024 to total $46.2 billion — a new high.
- As for the future attractors of ad spend, TikTok seemingly is unstoppable: WARC predicts its global ad billings grew by 27.1% to $17.8 billion through Q3 of 2024.
Takeoff & landing
- British digital media veteran Pete Robins is launching a new media agency in 2025 called Project5. It’s reportedly the fifth agency launch for one of the OGs of the British media agency scene (hence the name).
- Account moves: Omnicom Media Group expanded its work for Tata Motors beyond digital media to be full media agency following a six-month pitch … Storck, which owns the Werthers candy brand, chose Havas Media Network as its media agency in the U.K. … Healthy living brand Hain Celestial Group chose IPG-affiliated RED as its media agency in the U.S.
- Personnel moves: Independent Mediassociates promoted Ben Kunz to chief strategy officer, from executive vp … Independent Cossette Media made a slew of appointments: April Yau was tapped as vp of business leadership, while Marissa Cristiano and Ashley Lewis were promoted to associate vps.
Direct quote
“It feels like it’s about time for a new social media platform to emerge. Players like BeReal and Lemon8 have made valiant efforts over the past few years but nothing’s really stuck in the zeitgeist for longer than a blip. Even if TikTok doesn’t get banned and X doesn’t implode, the moment is still ripe for a new platform that Gen Alpha will call their own. Personally, I’ll be checking in with my 11 year old on the regular to keep tabs.”
—Steve O’Connell, co-chief creative officer at digital marketing agency Mod Op, on social media’s future.
Speed reading
- What will happen to Google as it faces down verdicts in two separate trials? Ronan Shields and Marty Swant offered their takes on closing arguments and next steps.
- Tim Peterson examined the cases for and against The Trade Desk’s new CTV platform.
- Kimeko McCoy looked at the rise of Walmart’s retail media business as an appealing alternative to Amazon in media buyers’ minds.
https://digiday.com/?p=561959
