HAS AGENCY CONSOLIDATION HELPED, HURT OR HAD NO EFFECT ON YOUR BUSINESS?
The frenetic pace of agency consolidation—it is estimated that more than three-fourths of total adspend is or will soon be controlled by agencies owned by one of the four giant holding companies—has not sparked discontent among the top U.S. advertisers. The study reveals that more than one-third of respondents found that consolidation has helped their business. Most, 46 percent, said it has had no effect. Only 18 percent of respondents said agency consolidation has hurt their business.
Respondents who said consolidation helped their business cited increased clout and exposure to more resources. Through consolidation, one client noted, "We were able to use their leverage to gain valuable media agreements during this down market year." Those who felt consolidation was a negative noted that quality of service suffered for those who are not huge clients of consolidated agencies, and several complained that the potential for conflict is much greater with consolidation. One client went against conventional wisdom, saying that "consolidation has led to fewer alternatives at unfortunately higher (on average) prices." Those who believed consolidation had no effect frequently noted that it is a "holding-company issue," as one respondent said, and does not affect their day-to-day relationship with their agency.
The categories most favorably inclined toward consolidation were entertainment/ publishing/services (67 percent), financial services (56 percent) and pharmaceutical (50 percent).