“Change is neither good nor good. It’s simply. Not all advertising executives share his sangfroid. Today, technology is changing faster than ever since Mr. Draper’s time. The result is a reshaping of Madison Avenue. , which makes some people live in their old fashioned style.
The biggest example of interference so far is the announcement of a deal on December 9 where Omnicom and Interpublic are the third and fourth largest advertising agency holding companies in the world by revenue, suggesting a merger to become the largest chart (see charts ). The deal constitutes Omnicom’s acquisition of Interpublic, which will bring together a list of customers including Apple, Disney, Johnson and Johnson and Mattel. While spanning the Publicis in France and the UK WPP, Omnicom will shift the focus of advertising to New York.
View full image
On the surface, the troubles in the industry are difficult to grasp. Indeed, worrying marketers of the incoming Trump administration suggest it could curb pharmaceutical advertising (6-8% of U.S. advertising revenue) or launch a trade war that could hurt big spending industries such as automobiles and electronics . But the ad has never been so big. Spending around the world will grow by 9.5% in 2024, exceeding 1trn for the first time, part of the WPP, with the help of the Summer Olympics and the U.S. election.
The problem is that more business is sliding out of the full hands of the agent supervisors who once controlled it. Technology companies led by Google, Meta and Amazon make it easier for companies to create and buy their own ads. GroupM predicts that the three companies, along with China’s Beast and Alibaba, will account for more than half of their advertising spending this year. Analyst Moffettnathanson said the COVID-19-19 pandemic and the up and down periods of the global advertising industry have been developing less than 3% since 2018.
Artificial intelligence (AI) threats to further erode their role. The generated AI can write copy and draw images; on December 9, Openai, the manufacturer of Chatgpt released its video generator Sora. AI also makes it easier to target consumers with the right advertising. Research firm Forrester predicts that by 2030, the technology could eliminate 7.5% of advertising efforts in the U.S. Additionally, AI tools make it easier for customers to advertise internally or provide work to smaller agencies. Advertising consulting firms Madison and Wall estimate that the five largest institutional holding companies had 30% of all agency services revenue last year, down from 37% a decade ago.
Omnicom and Interpublic hope that they will jointly protect these trends. Bosses of the two companies promised $750 million a year by combining the shared features and said they would make more investments in AI technology. Deleting a competitor from the top level of an ad will improve its pricing power. Regulators may not be like that. But, as Omnicom boss John Wren pointed out, Google and Co’s influence should make Trustbusters guarantee no shortage of competition. Mr. Wren also hopes that under Donald Trump there will be a more friendly environment. Madison and Wall’s Brian Wies said the collaboration had “a huge industrial logic.”
Will it enable institutions to compete with their technology competitors? This may be a wrong question. “If I’m looking for state-of-the-art AI, would I go to my advertising agency? He believes that Rishad Tobaccowala is Rishad Tobaccowala, a former chief strategist at Publyis.
Perhaps it is more likely that the agent will further develop new work. One broker Bernstein believes that the “holy grail” in the industry is combining advertising establishment with data analytics, which cited the successful acquisition of data company Epsilon in 2019. Publishis now has 25,000 engineers helping customers with all content. This is how to manage data.
The most vulnerable part of advertising seems to be the creative part. Mr Tobaccowala said: “The ability to produce advertising will drop significantly. Mr. Weiss may exceed the demand of a single company, and if the change in Adelan is not good for anyone, then it may be as creative as Don Draper Tube.
To keep your business and technology the biggest story, sign up Bottom lineWe only subscriber-only newsletters per week.
©2025, Journal of Economics Co., Ltd. all rights reserved. From an economist, published under license. The original content can be found on www.economist.com
