The consolidating ad agency industry
WPP Group this week announced it would acquire Grey Global, expanding the size of what is already the world's second largest ad agency holding companies.
The motivation? As we've been pointing out, only the big can really serve the big. A Wall Street Journal article agrees ("As WPP Group, Grey Global Combine, Client Conflicts May Surface", 8/15/2004), to wit: "The world's large ad-agency holding companies want to keep up with global marketers, not to mention proliferating media outlets." Ad agencies have to have global reach, they need expertise in a wide variety of media (print, TV,, radio, Internet) and services (branding, p.r., direct marketing, etc.), and they need to serve complex needs of their clients, expanding oligopolies themselves who have to reach target groups (black, Latino, younger people)..
The article points out that with fewer big agencies, conflicts of interest arise. For example, various divisions of the new WPP merger will service Procter & Gamble, Unilever, and Colgate-Palmolive. As the article points out, the big holding companies try to put firewalls between each division, but anxious marketing directors have used mergers as a reason to bolt.
Whatever the safeguards, it's telling that such intense competitors find themselves served by essentially the same companies, another example of convergence. And the top advertising minds regularly switch from one of the big companies to another, so there's a constant convergence of thinking processes and approaches.
Many of the acquisitions have taken place in the last decade. Where there once were a score of major independent agencies, there are now only four big players.
Top Advertising Holding Companies
| Company |
Latest annual revenue |
Main agencies |
Other divisions |
| Omnicom |
$8.6 billion |
BBDO, DDB, TBWA, Albert Mead Vickers, Della Femina Rothschild (49% stake), Goodby Silverstein, Dieste Harmel, Doremus, Martin/Williams, GSD&M, Zimmerman & Partners, LLNS, MNH Partners, GMR Marketing, Tracy Locke |
Fleishman-Hillard, Porter Novelli, Ketchum, Cone Inc., Gavin Anderson (public relations), LLKFB, Rapp Collins, Targetbase (direct marketing), Bernard Hodes Group (consulting), Interbrand, Siegel & Gale, Wolff Olins (branding), Critical Mass (software), MarketStar (marketing services), OMD (media buying), Agency.com (interactive) |
| WPP |
$7.3 billion + Grey Global $1.3 billion |
J. Walter Thompson, Young & Rubincam, Ogilvy & Mather, Einson Freeman, The Grass Roots Group, Healthworld Communications, Bravo Group, SicolaMartin, VML, Mendoza Dillon, Brouillard Communciations, (soon: Grey Global) |
The Kantar Group, Millward Brown (market research), Enterprise IG, Landor Associates, Red Cell (branding), Mediaedge: cia, MindShare (media buys), Geppetto Group, High Co., Savatar, Glendenning Management Consulting(consulting), Hill & Knowlton, Burton Marseller, Cohn & Wolfe (PR, plus GCI from Grey Global), Wexler & Walker (lobbying) |
| Interpublic |
$5.8 billion |
McCann Erickson, Deutsch, Foote Cone & Belding , Campbell-Ewald, Campbell Mithun, Carmichael Lynch, Casanova Pendrill, Dailey & Associates, GlobalHue, Gotham, Hill Holliday, Lowe & Partners, TM Advertising, The Sloan Group, R/GA, Mullen Advertising, The Zipatoni Company, Avreett Fre & Ginsburg |
The Hacker Group (direct marketing), ANALYTICi, Miller Starr (marketing software), Weber Shandwick, DeVries, The Martin Agency (public relations), Draft (consulting), FutureBrand (branding), Initiative Media (media buys), Jack Morton (multimedia), Octagon Worldwide (athlete repreentation), Momentum (sports marketing) |
| Publicis |
$4.8 billion |
Saatchi & Saatchi, Leo Burnett, Fallon Worldwide, BBH, Nelson Communications, Williams-Labadie, Vigilance, Bromley Communciations, Kaplan Thaler, Burrell Communications (49%) |
Publicis, Manning Selvage & Lee, Masius (public relations), Frankel, Arc Marketing , medicus(services), Zenith Optimedia, Starcom MediaVest (media buying) |
10:21:08 PM 
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