Mergers. Over the past few years, couplings between and among marketing services companies have come fast and furious. The result? A significant increase in the industry’s “concentration” and a larger share of total commission and fee income going into fewer but deeper pockets. According to a recent analysis by Merrill Lynch’s Lauren Fine, the top 10 advertising organizations accounted for 30 percent of worldwide gross income in 1989; 10 years later, the top 10 share had risen to almost 44 percent. Three of the giants–Omnicom, Interpublic and WPP–took in more than $4 billion last year. (WPP wasn’t even in the top ranks back in the old days.) Why is this happening? Is it a good thing? Will it continue? The combinations among ad shops have been spurred by two business trends on the client side. First, of course, is that clients are themselves merging. The most dramatic moves are in the biggest of industries, such as pharmaceuticals and automobiles. But it’s happening all over the place. These deals are struck to achieve economies of scale, which typically includes shortening the roster of advertising agencies. Even nonmerging ad clients are looking to save money and effort by using fewer shops. This consolidation plays right to the strengths of the large multinational networks, which have themselves seen an increase in market share from 22 percent for 1989’s top 10 to 30 percent for last year’s. The six biggest–McCann-Erickson, BBDO, J. Walter Thompson, Lowe Lintas & Partners, Euro RSCG Worldwide and DDB–each grossed more than $1 billion. Individual shops are bunching up, and the holding companies are adding to their portfolios for some of the same reasons clients do–to save on operating expenses and to become more competitive at winning new revenues. Is all this merging and resulting concentration good for the industry? Probably. The marketing services business is becoming progressively more capital intensive (it costs a lot more to buy an Apple computer than a box of magic markers for that new art director), and clients are starting to value integrated service offerings. The larger multifaceted service companies are better able to meet these demands. Clearly, the trend toward increased concentration will continue. The next big wave, already under way, is the joining of the more conventional shops with the dot.coms. And considering the relative valuations, don’t assume the old veterans will be buying the upstarts. In media, a nearby economic sector, America Online is about to gobble up Time Warner, unthinkable just a few years ago. Might Screwballname.com make a move on Interpublic one of these days? Weirder things have happened. Events, though, could take another turn. After dozens and dozens of mergers, maybe there’ll be only one client left standing. And on the agency side, likewise, there’ll be just a sole survivor. Then the client will move the account in-house.