Advertisers prefer independent agencies

New Ideas in MarketingEssential news for marketers, summarised by YouGov
May 04, 2021, 1:31 AM UTC

Agencies consolidated under one holding company are often compromised on creativity and quality.

Although aligning several agencies under a single holding company seemed to be a good idea, several agencies had separate P&Ls, leading to duplication and layers. To address this issue, several agency holding companies formed a committed, single-client, multi-disciplinary team with a centralised P&L account.

However, when choosing multiple agencies, only 2% of advertisers selected agencies from holding companies, according to COMvergence survey. It was also found that advertisers preferred best-in-class, stand-alone agencies in pitches while rejecting the combined agencies in holding companies.

With agency culture influencing innovation and culture being set by leadership and management, holding company agencies seem to lack both. Moreover, multiple agencies from holding companies are harder to track in terms of competitive benchmarks, while marketers can negotiate costs, and compare competitive rates with independent agencies.

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