When Big Agencies Get Bigger, Creativity Gets Smaller

An Echo of Previous Global Consolidation

There is an echo of familiarity in the news that following the Interpublic merger, Omnicom is going to cut 4,000 jobs and consolidate many of their internal agencies. Consolidation in public companies usually means creating shareholder value via “efficiencies“. Think back to the consolidation of the Big 8 accounting firms beginning in 1987 that led to the Big 6 in 1989, the Big 5 in 1998, and now the Big 4 since 2002. This has led to the revenue and market-value growth, but their per-employee revenue has remained flat or declined significantly, depending on the research.

So what does this mean? The larger work forces needed to meet the demand to show growth are made up of more specialized employees across more specialized departments. This larger workforce resulted in greater customer billings through inefficiency and reduced employee productivity. Sadly, their customers are paying more. They are buying more services for less. Their customers are essentially paying a tax for the Big 4's continual need to invent new products with a larger work force to meet shareholder demand.

The same thing will happen with Big Advertising. The supposed efficiencies gained in scale by these larger firms will ultimately be used to drive growth and profits while at the cost of the client experience. This is the death knell for inspiring creativity and responsive service for them and their clients.

Where will customers go for true innovation and creativity? To small firms like ours. People who are creative, understand a broad range of tactics and have a tight connection directly with our customers. Smaller teams are more responsive and available to build the strategy aligning with not only our customers' stated needs, but also with the unverbalized quirks and marketplaces of each product and brand. So much of this intangible information is lost when working with a massive company supporting offices around the world.

Its About Talented People…and AI

The global reach is not necessary in today's connected world. We can work with local market specialists anywhere in the world. Many of them are former employees of the large companies who know their trade intimately, and have left the behemoths to see the direct impacts of their work. Partnership among the smaller agencies is key. We know we can't do it all, but the marketplace is full of strategists, copywriters, artists and yes, AI.

AI by its very nature is a copycat model. What's needed is small, experienced teams, wielding the new tools to do more with less - able to focus on true creativity and innovative ideas for our clients - without all that bloat. We use AI to speed our customer research, not to design it. We use AI to build production efficiencies, not to replace the informed, creative spark that makes amazing adverting and marketing campaigns. We use AI for media placement and highly effective message testing and delivery. We use AI so that we can focus on amazing client service.

Make no mistake, the big firms use AI, too, and will increase their reliance on it to deliver investor returns, not improve their work. They will use it to shed more employees and bring their work further from true creative into a more universal slop for which AI has been so vilified. AI is only as good as the talented people running and using it.

We are all in an interesting place right now. We have seen this movie play out across other industries and other new technologies. I remember in the early days of web advertising. The folks from a global agency were telling our clients at a global software company that they could report on every ad link clicked on by a web visitor. We told the clients, “Bless their Hearts, that's nice. We can tell you who clicked on it, who signed up for a trial, who activated the trial and who then purchased the full product.” This was 2003. Twenty years later, we have seen this movie before. Anyone working at that agency now, has no memory of this. To them it is all new. It seems like the pendulum is about to swing back to an understanding of the value of the artisan in a world of globally produced mediocrity. As Brand becomes increasingly important in purchasing decisions, highly specific and thoughtful creative is still the key to success.

Get a Fresh Perspective on Your Marketing Strategy, email our founder to talk more: doug@catalysis.com.