Brands have a stark media agency choice: convenience or nourishment
Agency consolidation threatens creativity and service quality. Dave Levett, founder of Murmur, explains why clients should choose independent expertise over mass-produced solutions.
In 12 months our industry will look back on 2025 and the key theme of the Year of the Snake will be “consolidation”.
Put simply, market forces are collapsing businesses into and amongst each other at a rate of knots.
The holding companies have been quietly shuttering and smashing together storied brands for years now. WPP has been chief amongst them, merging creative and media agencies with abandon. We’ve now got the ongoing $13 billion merger of Omnicom & IPG and locally we’ve just heard of Publicis’ acquisition of Atomic 212 – Australia’s largest independent media agency.
There are two key reasons for the sudden surge in consolidation.
Firstly, there is an increasing focus on driving business efficiencies across fixed asset costs, and headcount / wages.
Analysts of the Omnicom-IPG merger forecast that savings across the combined agencies could be made across real estate, back-office, and the leadership team as well as across the wider business – saving upwards of $US750 million.
In the aftermath of COVID the rising cost of doing business has been simultaneously hit with a surge in headcount wages, pressuring already depleted margins and thereby making savings in efficiency all the more alluring.
The rapid rise in adoption of AI tools amongst all businesses has seen an increasing efficiency amongst agencies that is only set to continue for the next decade.
Global market research company Forrester recently stated “by 2030, generative AI to [will] account for nearly a third of automated advertising jobs.”
The second force driving consolidation is the increasing pressure from clients on advertising budgets.
Last month analyst firm Gartner delivered research that showed “average budgets dropped from 9.1% of company revenue in 2023 to just 7.7% in 2024”. A decreasing percentage of revenue attributed to advertising budgets means the size of the pie that all agencies eat from is getting smaller.
Inevitably some agencies are going to go without food.
Whilst optimism remains high locally in Australia with some experts forecasting Ad Spend to increase anywhere from 3.5% to 6.5% – no doubt helped by an election that will see Australia’s political parties spend upwards of $400m in 2025 – the recent spate of consolidation is sharp relief on the commercial reality we’re all operating in.
As a result of this consolidation clients would be in their right mind to expect the larger combined entities to have increased market power – with the ability to influence pricing, supplier costs, and even market dynamics in their favour.
However, as we’ve recently seen with price gouging from a major grocery duopoly, having a few large companies holding the purse strings and access to products shows doesn’t often equate to a better outcome for the customer.
The result of a focus on efficiency also means agencies are at risk of losing the agility, creativity, and innovative thinking that many clients need. A depleted agency with reduced headcount means more workload for existing staff, resulting in lower quality of service and time spent with, or even on, client needs.
For many clients the choice of who to work with is akin to choosing where to eat for dinner.
Clients can choose to eat at a chain – where the ingredients, food, process, in-store experience and menu are set by a central management team nationally,. A McDonalds in Sydney has the same menu as it does in Melbourne. There’s a certain convenience and ease with knowing what burger I can get when I walk into that restaurant. But there’s also a feeling you get that what you’ve had is just part of a machine and not giving you what you need for real nourishment.
Alternatively, clients can choose to eat at an independent restaurant, run by an experienced chef who is doing it because they genuinely love it. The ingredients, menu and innovation with the food are all curated for that particular restaurant, based on their experience and what is going to create the best experience at that particular moment.
Both types of restaurants will satisfy your appetite, the choice facing many clients depends on the experience that they’d like to have while eating.
Rene Redzepi, Heston Blumenthal, and Anthony Bourdain are all celebrated international chefs. Their restaurants are household names, and the dishes they’ve created over time are as timeless as they are famous. Locally, the likes of Neil Perry, Peter Gilmore or Kylie Kwong curate restaurants that are on any connoisseur’s bucket list.
All these chefs have developed their palate, their menus, and their restaurants over years of experience – an expertise that defies anything found in any chain restaurant anywhere. It’s no surprise that the gourmet restaurants are also those which attract the very best budding chefs from across the world, who flock there to truly learn their craft.
Just as gourmet restaurants are run and led by a chef, Independent agencies are led or run by an expert in their field. Independent agencies have a fluid agility, inspiring creativity and thirst for innovation, unlike that found in the larger advertising agency chains.
Dave Levett
For us at Murmur that manifests in a constant push for ways to innovate and help our clients bridge the gap between challenge and opportunity in a media market which is more dynamic and volatile than ever before.
Just as a chef would hire an expert sommelier we have brought in industry expertise to deliver Marketing Mix Modelling to our clients, demonstrating where media investment is best served, optimised, and delivered. We sadly don’t get given Michelin Stars to slap above our door to show the quality of our work, so we have to settle for the recognition and acclaim we’ve received from industry awards, as well as clients locally and globally and the satisfaction of the results we have delivered.
The increasing consolidation amongst “The Big Five” will lead to efficiencies in their operating models, but the risk of decreasing service levels coupled with the loss in creative and strategic sparks that ignite innovation will soon pose big questions for many brands who find, just as Morgan Spurlock did in Supersize Me, that a convenience-based diet doesn’t offer the long-term sustenance they need. .
There are 149 3-Star Michelin restaurants globally. It is the highwater mark of the food industry. A lifelong pursuit and ambition to be the best in the world.
Not a single chain can be found on the list. All of them, run by a chef who still puts their heart and soul into every single dish which leaves their pass.
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If Michelin stars are a sign of success in the restaurant industry, then a parallel can be drawn to our industry awards – global ones in particular (internationally recognised) such as Cannes. Looking at the recipients of these awards, seems to me the networks fare quite well.
Im a cheerleader of innovation and take my hat off to those selling it. But proof is in the pudding and size certainly doesn’t guarantee an innovative approach. Having hired from Indies, I find the staff often lacking in real depth of knowledge due to not being exposed to clients sophisticated enough to demand innovation or enough innovative technology or even structure around them to teach them as well.
Also – the pathway to Indies starting is often more borne of an entrepreneurial spirit wanting to run their own business and reap the financial rewards or working flexibility they couldn’t get at a network. Id hazard a guess it was rarely because there wasn’t enough innovation on offer. Some may call that a vanity project. Then of course is the sell at the end…
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Really? This again? I have worked in media agencies for 25 years. almost exactly 50/50 Indie / Multinational. I have seen no evidence that innovation or personal investment the work produce4d had anything to do with whether in was an indie or not. I get that you need to spruik your business and fair play for backing yourself, but the fact that you’ve used consolidation as a trojan horse to roll out the same story as every other indie doesn’t exactly speak to innovation does it?
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While I appreciate your perspective, I’d have to disagree. Obviously there are talented and committed individuals across the industry. But the point being made isn’t that indies have a monopoly on innovation, rather that their structural independence often enables it in ways that holding groups simply can’t match.
Consolidation in the industry has led to a prioritisation of scale and efficiency, often at the cost of flexibility and bespoke client solutions. That’s not an attack; it’s a reality of how large networks operate. Indies, by nature, don’t have the same commercial pressures or layers of approval that can stifle unconventional thinking. That’s not a rehashed sales pitch—it’s a fundamental difference in how these businesses are built.
Fair play for challenging the argument, but let’s not pretend that structure doesn’t shape outcomes.
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I used to think that what many clients wanted was Michelin star meals but at all-you-can-eat buffet prices. However, I don’t think even that holds true any longer. Today, I think the majority of clients are more than happy ordering day-to-day from a short menu of digital platform burgers and fries, all ready to go now and costing no more than $5. What is ordered, and how it is ordered, defines what is received far more than whether the supplying agency is network or indie.
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