CMOs, Take Advantage of the Opportunity That Exists in Agency Consolidation

©IDG Communications, Inc. Photo contributed by Matthew Mikaelian.

How a Redefined Client-Agency Relationship Must Spur Change Within Marketing Organizations

Ad Age, 3/14/11

Capitulation came down with a thud last Wednesday morning at the 4A’s annual conference in Austin. Perhaps missing the irony, the CEOs of the biggest advertising holding companies pointed to fiercely independent micro-network Wieden & Kennedy as the agency they admire most. Thus, and possibly unwittingly, they foretold how the world of advertising would reset in the next few years. The financial squeeze that agencies experience will prompt a significant restructuring of the global advertising agency model. And this, in turn, will require global CMOs and marketers to review their strategic alliances with communication partners.

The heart of the matter is that in a digitized world, the traditional, multinational agency model is unsustainable and inefficient. By and large, legacy agencies have not caught up with technology, and their business model, though it has globalized, is not substantially different than that of N.W. Ayer’s, the first agency in the U.S., established almost 150 years ago.

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