Agencies aren’t platforms– and they never ever will be. Let’s not kid ourselves.
At finest, they’ve meddled platform cosplay; a pinch of information here, a smidge of repeating income there.
The concept that they’re about to shed their old-school holding business identity? Wishful thinking. Still, it’s a misconception that simply will not pass away, enthusiastically recycled by holding business CEOs for several years.
Previously this month (December 9), it made another resurgence with the statement of Omnicom’s strategy to get IPG. To win over the marketplace, both CEOs leaned greatly on the “firm as a platform” story, pitching their proposed mega-group as a platform. They talked up the requirement to welcome software-as-a- service-like functions and worried the value of structure tools, framing the merger as a game-changing thorough marketing platform.
The vision: much better customer results through tech and information combination, sped up development and leading tier services. The truth: a glossy rebrand of organization as typical
This may sound severe– after all, neither CEO has actually had a possibility to show the strategy. The hesitation is rooted in a long history of damaged guarantees and hollow visions from the holdco c-suite.
Financiers appear to concur.
Omnicom’ stock dropped 10.47% in the week because the offer was initially reported. Real, IPG’s stock has actually fared much better (up 10%), however that increase feels more like a nod to its standalone potential customers than a vote of self-confidence in the merger’s transformative worth.
“Agencies as a platform company is a buzzy thing to state, however there isn’t a basic meaning of that expression,” stated Joe Maglio, CEO of digital innovative company Barbarian and president of Cheil North America.
And there’s the rub.
“Agencies as a platform” feels more like a misconception– unclear, overhyped and seldom connected to truth. The misconception withstands, sustained by the stress in between goal and responsibility of holding business CEOs. They imagine being innovators, however they’re shackled by the needs of running openly traded business: going after scale, calming investors and striking quarterly targets. In attempting to be whatever– ingenious yet foreseeable– they wind up stuck in the middle, offering stories that do not rather hold up.
Hard service to be in when you’re defending advertisement dollars.
Take GroupM. Its platform play leans greatly on media purchasing influence, however it’s still more pipeline than platform. Havas talks combination in between information and material however hasn’t meaningfully separated itself from standard firm designs. And Dentsu? The business leans hard into its consulting and tech qualifications, however still has a hard time to leave its company roots.
There are outliers, obviously.
Publicis Groupe sticks out as the most reputable competitor. While still far from best, the group has actually pressed its platform story even more than many, investing greatly in innovation and information through relocations like its acquisition of Epsilon and its “Power of One” design. Even its critics confess’s closer than others to making the misconception a truth.
