Why Individual Agency Identities are Disappearing — And What It Means for CMOs

Imagine trying to launch a company with little more than incredibly effective branding to propel you forward. Your business would likely rise to consumer awareness quite quickly, and your product line might even snatch its coveted 15 minutes of fame, but your company would quickly fizzle and disappear. With no real product quality to support your image, even the highest level of branding won’t set you up for long-term success. The same holds true in the advertising industry. 

The History – and the Future – of Marketing Agencies

Marketing companies develop their own branding, it’s true. We need to attract clients just like your business needs to attract customers. But without the advertising chops to back up that branding, marketing companies would simply be spinning their wheels. 

Once, advertising legends like David Ogilvy and Leo Burnett attracted clients to their agencies based on their own reputations. Clients flocked to their offices because they were heavily influenced by their individual and agency identities. And it makes sense – we’ve all been reeled in by a well-branded company at some point in our lives. But fast forward several decades to today’s advertising climate and global holding companies are choosing to merge creative agencies, making individual brand identities increasingly less important. 

Performance and digital marketing expertise, however, are more important than ever before, and individual brand identities like the Ogilvys and Burnetts of the past are becoming far less critical to success. The advertising industry is moving toward a merged agency model. Global holding companies are rapidly replacing individual agency identities. This merger is largely driven by the ascendance of digital and performance-based marketing, a globalized marketplace, and ongoing economic pressures. Let’s examine each of these three factors in greater depth to truly understand what led to these structural changes:

Navigating the Post-Mad Men Landscape. Though they played an important historical role in the growth of ad agencies (and made for a wildly entertaining television series), the Mad Men days of agency identities are over. They were interrupted by, among other things, the rise of digital marketing and performance-based marketing, where brand clout takes a back seat to seamless UX, data-driven analytics, continuous campaign optimization, and limitless results.
The Strategic Merits of Agency Holding Company Consolidation. Agency holding companies often boast a global reach, so combining forces and creating one powerful, multi-talented marketing agency that can cast its net further than ever before simply makes good business sense. This fact is important to remember when so many of today’s brands have (or want) a digital or physical footprint in more than one country. Consolidation within agency global holding companies saves individual agencies from having to slog through overseas agency coordination just to gain similar results.
The Shift in CMO Priorities. With the ongoing economic squeeze and market pressures driven by global competition, Chief Marketing Officers are zeroing in on time and cost efficiencies rather than creating a “big name” agency brand. Add to this the fact that 45% of ad execs are actively hunting for greater flexibility and 37% want to streamline their operations through fewer, more tightly integrated partners. Lastly, marketers are demanding more selective, a la carte models where they have greater control over what they pay for. Attaining this flexibility, fewer points of contact, and greater agency control is simply not feasible with numerous smaller agencies spread across different markets. Instead, it’s consolidation by agency holding companies that leads to far greater efficiencies.

The Potential Drawbacks of Agency Holding Companies

With any new development, there are benefits and there are drawbacks. We would be remiss not to point out these potential pitfalls, so to provide the most comprehensive picture possible, let’s also examine how an agency holding company could be detrimental to individual agencies and the advertising industry. 

First, clients often find themselves having to explain their marketing and advertising needs and goals repeatedly to different groups within the holding company, be it the creative leads, the production team or the account manager. The lack of coordination within the holding company leads to more inefficiencies and frustrations on the client side – not to mention ideas lost in communication among the holding company’s various agencies and teams. Even worse, competition for the client’s business among the different agencies can result in sub-par work. For example, if the creative agency is determined to keep production within their team rather than share it with the production agency who can deliver a better creative product, the result is a loss for the client.

The Leap Group Model: A Masterclass in Collaboration

The Leap Group model is uniquely built from a client-first perspective. Rather than functioning within limited marketing verticals, we provide deep domain expertise, a collaborative, unified approach, and total client control over the services they engage. How do we accomplish such a herculean task? Through the unification of all our talented agencies under one Leap Group umbrella.

Leap Group is a bespoke agency holding company that was purposely built to serve our clients the highest quality marketing services. We live in the balance between efficiency and creativity, delivering the best of both worlds while championing individuality, originality, and innovation. By combining specialty agencies and SMEs under one virtual roof, we provide deep domain expertise while streamlining operations. When your business partners with Leap Group, you gain access to every one of our masterful agencies, giving you the benefit of streamlined simplicity that looks like this:

Centralized communication: When you join forces with Leap Group, you’ll only need to execute one negotiation and one contract. Our leadership and resourcing is consolidated for ease of communication. Instead of having to fight through a long list of agency members’ names you don’t recognize, you will receive a single point of contact from our Client Experience Team. 
Greater client control: Leap Group clients only pay for what they need. Our hybrid model simplifies the entire process so clients can scale their businesses and customize our relationship to fit their goals. Take advantage of our entire suite of platforms, software, and resources, or use only what you need most. And if your needs change, your contract can change, too.
Best-in-class talent and collaboration: We attract the best and the brightest from around the country and incentivize our agencies to collaborate – not compete. Leap Group agencies are unified by a shared philosophy – “Matter More” – and driven by a passion to deliver outstanding creative that gets real results. With the flexibility to assemble teams that best meet a client’s or project’s specific needs, our agency holding company is uniquely positioned to provide unparalleled creativity and client success that the modern advertising industry demands.

Explore Leap Group’s unified approach to marketing and client services by contacting our team. We are committed to reshaping the advertising industry through a collaborative spirit that generates success for everyone on our team, including your business. See how joining forces with Leap Group could propel your brand forward this year by reaching out today.