Why 2025 will see greater polarisation among media agencies
By Suzana Lay, Planning Director, The Grove Media
Following the recent mega-merger between Omnicom and IPG, no-one can deny that the media agency landscape is shifting again.
While everyone watches to see how that merger plays out, new alliances are being created among smaller independent agencies to stave off the risk of blandness entering adland.
And here, Suzana Lay, Planning Director, The Grove Media, explains why we are likely to see greater polarisation among agencies this year…
This year started with all eyes on Omnicom and IPG, as the two holding companies move forward with their planned mega-merger.
They follow in the footsteps of WPP’s move to focus on a smaller number of larger agency brands and Group M’s recent shift to a more centralised approach to media.
Away from the media agency giants, January saw the launch of the Alliance of Media Independents, launched promising to counter the homogeneity of the holding companies.
And this was quickly followed by the arrival of the Department of Creative Affairs, a pitch consultancy focused on independents.
While both indies and big networks have been around for many years, this year we are likely to see a greater polarisation of the two camps and the independent sector stepping up to demonstrate its value.
Size of market
Let’s face it, the market is big enough to support the very large and the very small media agencies and everything in between.
Advertising spend in 2023 was £36.6bn (based on statistics from the Advertising Association and WARC) and 99% of this is by brands with budgets under £3 million.
In fact, the top 10 to 15 biggest media agencies are now largely focused on the top 1% of advertisers.
Most advertising and media agencies in the UK are small and cater for the specific needs of their local clients.
There are also specialists out there focusing on regional advertisers and specific category needs.
It’s increasingly clear that one size does not fit all, and the moves to support a vibrant indie media sector are testament to this.
AIA
The Alliance of Media Independents has been created by the Alliance of Independent Agencies (AIA) and the Land of Independents.
It’s an initiative aimed at sharing knowledge and support for independent media agencies.
This will include fostering closer ties with media owners and partners, and It’s estimated that the agencies launching with the AMI represent more than £800m in billings.
However, this type of venture is not new. There are other alliances out there, such as Pimento, supporting and bringing together the value of independent agencies.
But what the launch of the AMI does indicate is the advertiser appetite for independent agencies and the growth potential in the sector.
Creative Affairs
The launch of the Department of Creative Affairs is interesting in that it’s been set up to help champion independent agencies through an intermediary designed specifically for them and to enable indie agencies to compete on “an even footing with network agencies”.
Of course the alliances are not the only ones moving into independent media. There have been a few notable launches by indie creative agencies in recent years.
VCCP set up its media offering over a decade ago and Mother launched Media by Mother last year, having trialled the approach in the US.
What these creative hot shops recognised is the need and opportunity to have their own independent media offering.
But while we are seeing the rise of media independence, this in no way diminishes the role and value of the large networks.
For international companies and the largest national advertisers, they are an obvious contender.
The big networks have unrivalled global presence, an ever growing list of capabilities and huge buying clout. Only the very biggest media independents can compete with this.
But for clients that aren’t looking for vast scale, what media independents offer is a truly client-centric service, from client-dedicated teams, often led by very senior people. Independents are genuinely flexible and dynamic and are simply not constrained by endless layers of hierarchies.
Buying and trading
The other key difference between independents and networks is buying and trading. Independents are not bound by holding company volume deals and can be truly transparent and agnostic.
While networks can sometimes offer exceptional pricing, the media holding companies have come under the spotlight with accusations of opaqueness in volume-based trading agreements and some are increasingly using ‘principal-based’ media trading models to increase their margins.
What we are seeing now is a media industry that is evolving and responding to client needs. And while those needs are ultimately about great results and value for money, there are many different ways of getting there for advertisers of all types and sizes.
I do believe we will see increasingly polarisation between the holding company networks and the independent sector as the former goes through further consolidation and the latter becomes more vibrant and better supported.
This article first appeared in mediashotz, link below
Why 2025 will see greater polarisation among media agencies –
