Agencies aren’t platforms — and so that they never will be. Let’s no longer kid ourselves.
At most intriguing, they’ve dabbled in platform cosplay; a pinch of files right here, a smidge of routine income there.
Nonetheless the postulate that they’re about to shed their inclined-college conserving firm identity? Wishful taking into consideration. Clean, it’s a delusion that honest obtained’t die, enthusiastically recycled by conserving firm CEOs for years.
Earlier this month (December 9), it made one other comeback with the announcement of Omnicom’s conception to present IPG. To agree with interplay over the market, each and every CEOs leaned heavily on the “agency as a platform” yarn, pitching their proposed mega-neighborhood as a platform. They talked up the need to embrace tool-as-a- carrier-love functions and pressured out the importance of building tools, framing the merger as a game-changing total advertising and marketing platform.
The imaginative and prescient: better client outcomes by tech and files integration, accelerated innovation and top tier products and services. The actuality: a shining rebrand of industry as long-established
This could well sound harsh — after all, neither CEO has had a possibility to video display the conception. Nonetheless the skepticism is rooted in a long history of damaged guarantees and gap visions from the holdco c-suite.
Traders seem to agree.
Omnicom’ inventory dropped 10.47% in the week for the reason that deal became first reported. Actual, IPG’s inventory has fared better (up 10%), but that upward push feels more love a nod to its standalone possibilities than a vote of self belief in the merger’s transformative price.
“Agencies as a platform industry is a buzzy thing to articulate, but there isn’t a worn definition of that phrase,” acknowledged Joe Maglio, CEO of digital inventive agency Barbarian and president of Cheil North The United States.
And there’s the rub.
“Agencies as a platform” feels more love a delusion — obscure, overhyped and seldom tethered to actuality. Yet the delusion endures, fuelled by the strain between aspiration and obligation of conserving firm CEOs. They dream of being innovators, but they’re shackled by the demands of working publicly traded firms: chasing scale, appeasing shareholders and hitting quarterly targets. In looking out for to be the entirety — revolutionary yet predictable — they find yourself stuck in the center, promoting tales that don’t quite engage up.
Not easy industry to be in if you’re struggling with for ad dollars.
Rob GroupM, as an illustration. Its platform play leans heavily on media buying for clout, but it definitely’s aloof more pipe than platform. Havas talks integration between files and boom but hasn’t meaningfully differentiated itself from worn agency gadgets. And Dentsu? The firm leans laborious into its consulting and tech credentials, but aloof struggles to flee its agency roots.
There are outliers, obviously.
Publicis Groupe stands out as essentially the most credible contender. Whereas aloof removed from supreme, the neighborhood has pushed its platform yarn additional than most, investing heavily in skills and files by strikes love its acquisition of Epsilon and its “Energy of One” model. Even its critics admit it’s nearer than others to making the delusion a actuality.
“Publicis has completed a just correct job of making Epsilon and its tech industry a level of interest of the yarn round its success,” acknowledged Charles Ping, managing director at Winterberry Team. “How integrated it truly is with the wider agency proposition remains to be considered, but it definitely’s determined they’re ready to level to that they’ve a media and files assortment survey of the arena that just a few of their counterparts are making an are attempting to attain with diverse levels of success.”
Yet, Publicis remains rooted to the foundational substances of the ad change: media billions and artistic products and services. Files and skills, encapsulating its more platform-love choices corresponding to Epsilon and Publicis Sapient, accounted for a third of the neighborhood’s income very most intriguing year. Spectacular? Obvious. Nonetheless no longer transformative. Publicis, love its friends, is aloof navigating the gap between platform capability and legacy actuality. And the gap remains vital.
To agree with interplay how wide that delta is, compare Publicis’ efficiency to Accenture Tune’s. The consulting firm’s advertising and marketing arm generated $19 billion in income for its fiscal year 2024, a 7% expand from the old year. Publicis, on the opposite hand, reported €10.1 billion in income ($10.5 billion) for the principle 9 months of 2024. The disagreement is stark and underscores honest how a long way worn conserving firms aloof desire to head.
The gap looks even starker when Accenture Tune’s skill to leverage skills as a improve driver. Generative AI, as an illustration, accounted for $3 billion in reserving at some stage in Accenture’s very most intriguing fiscal year, signalling its future income capability. These bookings portray no longer honest passion but commitments to mammoth-scale projects — a testament to Accenture’s skill to stable transformative opportunities.
For conserving firms aloof entrenched in legacy constructions, the takeaway is determined: transformation requires more than ambition or rebranding. It demands an total overhaul of the industry mode. Accenture’s success with generative AI reveals what’s imaginable — and underscores honest how a long way worn companies aloof desire to head.
Here’s the fundamental distinction, essentially essentially essentially based on Jared Belsky, CEO of self ample agency Acadia. Platforms work on account of they’re scalable, repeatable, and uniform. The entire lot they attain is collated, quantified and underpinned by self-carrier tool, he persevered. That’s what scales efficiently.
Agencies, on the opposite hand, don’t operate this yet — no longer in any essential sense. Their work is something else but repetitive. If something else, it depends on person briefs, fable directors and ad hoc groups, resulting in a single billion plenty of systems to answer to the identical short. Scalability depends on alongside side headcount, Uniformity? Most continuously ever. And self-carrier? It doesn’t exist.
To produce all of this — scalability, repeatability, uniformity and self-carrier — companies would desire to interrupt free from the very practices they agree with been constructed on. The anticipate is can they? Or are they too entrenched in legacy habits to evolve into something recent? To this level, the answer leans toward the latter.
Belsky outlines three main shits companies desire to gain to even a attain a platform model:
Hire handbook-love executives: Agencies can’t alternate if their leaders don’t mediate in a more course of-oriented attain.
Decrease headcount: Being more course of-driven capability relying on systems and skills rather then sprawling groups, which is able to require a mindset shift at some stage in the change.
Redefine the change’s DNA: Agencies must pass beyond their short-centric, improvised nature to embrace scalable, tech-enabled choices that bring constant results.
Bottom line: For companies, breaking the platform delusion isn’t honest about ambition, it’s about redefining the entirety they attain.
“If companies desire to be a platform then they desire to gain themselves unavoidable, and essentially the most efficient attain they are able to realistically attain that now is arguably by precept-essentially essentially essentially based media,” acknowledged Chris Novak Chief Working Officer at media consulting firm Eden Collective.
