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The marketing communications holding companies, like the industrial conglomerates that preceded them, were created through M&A transactions and run as decentralised financial holdings. In this business model, acquired agencies and businesses are expected to improve their financial performance by growing revenues, profits and profit margins. The holding companies make additional acquisitions, using their ever-increasing stock …

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Creative Agencies are Failing to Deliver People-Based Marketing The traditional agency model has encouraged the separation of Creative and Media - different processes, different cultures, different P&Ls. And over the years, they’ve never really shown much love for each other. Creative has often looked at Media as the boring afterthought of advertising, and Media has usually seen Creative as the spoiled child who always needs to get their own way. Over the past decade, Media agencies and their business models have been blown up by digital marketing complexity, auction pricing, technology and powerful new arrivals such as Google and Facebook. Meanwhile, Creative agencies have hardly changed at all. That was Don Draper’s suicide.

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One could argue, as I’m about to, that when the agency compensation system moved from commission to fees the equivalent of a slow moving meteorite was launched toward the advertising business. But because it was so slow at the time, real calamity felt like it was a zillion miles away so there wasn’t a sense of urgency to change things much. Staffing adjustments were made and things moved on as usual. In the years that followed, the meteor began to pick up steam. The media environment began to evolve making things harder to measure. Digital exploded on the scene. Pitches based on price wars began. Some clients went to zero-based budgeting. Consultancies decided the agency business was fair game. Tech companies like Google and Facebook have grown increasingly powerful. P&G pulled $100MM of digital spend and nothing happened. And most recently, WPP’s stock price plunged when they reported a slowdown in global ad spending. Slow no more, the meteor is now breaking earth’s atmosphere.

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All industries are going through digital transformation, including creative agencies, says Mirum's CMO.

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Old -fashioned advertising and pricing transparency is a good start.

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And what we’ll need to do to get there

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WPP is trying to fend off threat from Google and Facebook

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Wendy's has named VML its new creative agency of record without a review, ending its relationship with Publicis Groupe after nearly seven years. The Kansas City, Mo.-based shop, which is owned by WPP, had been working on the digital side of the Wendy's business since 2012, when it beat four other agencies in a review.

Digital Media