Agency holding companies consolidating agencies
After all, the shiny new thing is like catnip to agencies — I think most of us still remember the number of blockchain agencies that cropped up last Spring at Havas, Group M and others. ” said one DTC brand founder to me when the Dentsu announcement came out. Amazon has begun testing a so-called “clean room” for marketers and the e-commerce giant to cross-reference their respective data sets in order to inform advertisers’ campaigns, according to an Ad Exchanger report published Aug. Amazon by no means invented clean rooms, which are designed to be privacy-safe environments to commingle advertisers’ customer data and platforms’ aggregated audience data.Google and Facebook already offer clean rooms for advertisers, and marketers including Hershey’s and Unilever have been developing their own versions.There are still independent owner-operated agencies out there, but in ever fewer numbers than ever before, and most are small by comparison with the group-owned brands.Sitting at the very top of the industry pyramid are a small number of holding companies.DTCs work differently, so these agencies made it a point to pitch their capabilities to these brands, with closer relationships and a supposed better understanding of the nuances of the business.
“They’ve been talking about doing that for a while,” said the first agency exec.
At the same time, the complexity of the changing landscape, combined with economic pressures, persuaded clients to move away from the traditional method of remunerating their agencies via payment of a flat 15% agency commission towards negotiated fees.