Indie creative agencies react to the Omnicom-IPG deal

Independent creative agencies are using the occasion of the proposed Omnicom-IPG merger to further their argument that holding companies are more interested in attaining efficiencies across advertising services such as data and tech than in fostering great creative talent or ideas. There was little mention of creativity on Omnicom Group and Interpublic Group of Cos.’ investor call Monday to discuss the merger. Omnicom CEO John Wren mentioned the “creativity, innovation and effectiveness” of both companies in his opening remarks, but the words “creativity” and “creative” didn’t come up again—as the call was largely devoted to synergies, scale, growth areas and cultural alignment. Also read: Ad Age World’s Largest Advertisers 2024 Global ad spending, rankings, analysis and profiles for the biggest marketers Click here Both Omnicom and IPG have storied creative agency brands—including BBDO, DDB, Goodby Silverstein & Partners and TBWA on the Omnicom side, and Deutsch, FCB, The Martin Agency and McCann within IPG. During the call, Omnicom and IPG executives said they value the power of those agency brands and their individual cultures. However, many observers outside the holding companies said the merger is being driven by business efficiencies that have nothing to do with creativity. One independent agency CEO, speaking on the condition of anonymity, said the deal is being driven out of desperation, as the business has evolved and clients are less willing to pay for the bundled advertising services that holding companies offer—many of which, such as media buying, have become heavily automated (and will only be more so with AI). “Decades ago, these were creatively oriented companies. They’ve become digital and media companies with a bit of a creative hat on top—the creative piece gets outsized attention in a business that has very little to do with it,” the CEO said. “The service-based nature of the business is where holding companies always make their money. With [this merger], they’re going to feel even more like data/tech companies in a very short amount of time.” It’s long been a cliché that holding company agencies can’t be as creative as indies, because the pressure to deliver regular profits makes creative risk-taking perilous. But the indie agency CEO said the changing business has made those pressures more acute, which squeezes the creative agencies that much tighter. “It was all good when holding companies were doing well—it was easier for them to protect the creative piece of their business. But they’re not in that business,” this person said. “What I’ve been hearing [from holding company agencies] in the past few years is, ‘They’re squeezing the shit out of us.’ It’s hard to protect the creative culture at creative agencies from the pressure that’s built up at these holding companies.” “More and more it appears that indies and holding companies are serving different gods,” said Greg Hahn, co-founder and chief creative officer at Mischief, who spent many years in top creative roles at BBDO. “Generalization alert, but for the most part, indies are about growth through passion, people, freedom. The holding company model is about math.” Read Ad Age’s Best of 2024 stories here The value of the holding companies isn’t going away for many larger global clients. But smaller clients who need game-changing ideas more than bundled services may be drawn more to independents. “Efficiency and scale usually sit on the other side of the spectrum [from creativity],” said Ari Weiss, former global chief creative officer of DDB, who recently opened the indie shop Quality Experience. “This leads me to believe we’ll continue to see the creative incubation chambers coming from the independents. It’s their competitive advantage, and clients that don’t need the global insights with local activations will come to these new boutiques because they offer full access to the leadership team, speedy and flexible thinking around modern media behaviors, and of course, most importantly, creativity.” “For larger clients, [the Omnicom-IPG merger] may be a plus for combined clout in media,” said Joanne Davis, founder of agency search firm Joanne Davis Consultants. “For smaller-spending clients concerned about getting lost and talent leaving legacy agencies, it may cause them to look at other smaller agencies.” If anything, indies see their competitive advantage only growing in the wake of a merger like Omnicom and IPG’s, as it creates an even bigger industry player that may be even less nimble and capable of evolving. “Historically, whenever you’ve had consolidation, independent agencies have done better, not worse,” said Neal Arthur, global CEO at Wieden+Kennedy. “The value of independence is that it allows you to be flexible enough to change and evolve in the way that the world and the business are changing and evolving. It’s harder for holding companies to adapt and and change, because of the scale.” “This merger punctuates a fundamental tension in the advertising industry: while Wall Street touts the future of ‘data-driven personalization,’ the most transformative work has always sprung from human insight and creative imagination,” said Lisa Clunie, CEO of indie agency Joan. “Yes, this is a win for shareholders, but it also signals how challenging it is to nurture a culture of breakthrough creativity within the constraints of a public company. True innovation in advertising doesn’t always follow a predetermined path—it requires the freedom to find unexpected solutions.”

Indie creative agencies react to the Omnicom-IPG deal

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