Simply Speaking Shorts #9: Disintermediation, e-commerce, AI - The three horsemen of the apocalypse
Legacy creative agencies are vanishing as ad giants like WPP and Publicis consolidate, pivot to digital, and bet on tech, data, and AI to survive a rapidly changing marketing world.
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An alphabet soup of creative agencies, will disappear via consolidation.
The obituary might read :
Once ruled by big ideas and bigger flair,
Now lost in slides and vacant stares.
Outpaced by code, outbid with ease,
Buried in pitches no one sees.
Forget Omnicom -IPG.
It’s more sobering to see what the likes of WPP are doing as a reaction. Storied agencies are being buried in quiet funerals. WPP currently manages over 140 agency brands, which the CEO acknowledges as 'too bloated'.
Merging overlapping agencies—like collapsing GroupM into a single “WPP Media” umbrella reduces internal competition and simplifies operations.
A unified ‘WPP Media’ aims to present a stronger, clearer proposition to clients and investors. WPP’s decision to close or merge iconic agencies like Young & Rubicam and Grey isn’t about their creative legacy or state of competency. It’s a strategic move driven by broader business pressures.
Agencies such as Y&R have been merged into newer hybrids like VML-Y&R, which joined with Wunderman Thompson to become VML in 2023. Grey, meanwhile, is being folded under the larger Ogilvy Group, while still keeping its brand identity within the network.
The world’s major advertising firms are grappling with a market now largely controlled by the digital dominance of Google and Facebook. At the same time, their top clients—like Procter & Gamble and Unilever—are facing disruption from nimble online startups and platforms like Amazon.
These clients are reducing their reliance on traditional ad services and increasingly bringing marketing capabilities in-house.
The advertising groups are responding by hiring talent and acquiring businesses. The most sustained actions have been by Publicis and it has paid off thus far.
Publicis has evolved from a traditional ad-holding conglomerate into a data and tech-centric global marketing powerhouse. Its recent M&A activity underscores a shift toward identity-driven performance marketing, influenced by AI, e-commerce, and creator economy trends.
It went shopping in media, data & digital expansion with Digitas, acquired in late 2006 and Razorfish – purchased from Microsoft in October 2008 to bolster web and mobile digital services.
It chased Consulting & Technology integration with an acquisition of Sapient Corporation in February 2015 ($4 billion) to form the digital transformation arm Publicis Sapient and it acquired Rosetta in 2011 to strengthen U.S. digital marketing presence.
Recognising data and identity platforms as a key enabler, it bought Epsilon Data Management in December 2019 for $4.4 billion to enhance identity-driven marketing and data services and Profitero was acquired in May 2022 for retail e‑commerce analytics, aligning with commerce media expansion.
It waded into new area with Corra – acquired in June 2023 to strengthen Adobe commerce implementation services and Lotame for independent identity-data solution to enhance Core AI identity capabilities.
Their plans mostly boil down to two things: investing in digital services and consolidating their collections of businesses so that they can provide a range of services to one client more cheaply under one account.
It better work.
Shubhranshu Singh is CMO, Tata Motors CVBU. He writes Simply Speaking, a column on Storyboard18. Views expressed are personal.
