The world’s largest advertising agency holding groups are fighting a battle on two fronts: scaled media and principal-based buying.
As Campaign’s Gideon Spanier wrote last week, the holdcos have made their individual media agencies take a backseat to the parent buying group. This secures tech-enabled scale with standardised processes that perhaps replace individual strategist and planner/buyer smarts. It also secures principal buying muscle that these holdcos can use to drive margins higher in what, perhaps, they see as a winner-takes-all battle for spots, dots and market share.
But what about those media agencies that don’t, ultimately, report back to Mark Read, Arthur Sadoun, Phillippe Krakowsky or John Wren?
To find out, we rounded up some of the most important independent media agency bosses in the country–and notably those that often don’t feature in the trade press–with help from our friends at the Independent Media Agencies of Australia for the first in a series of roundtable discussions on what actually matters at the coalface of the media industry.
Money, Scale & Sleight Of Hand?
Principal buying has attracted a lot of attention in recent months. At the moment, it’s a phenomenon affecting the TV market in Australia and not much else. It’s been described elsewhere as “shady” and a “shady underbelly” of media buying. It’s also been said that these deals mean agencies are not acting in their client’s best interests–or their own.
While the top end of town seems to be obsessed with driving margins through principal buying (or, perhaps, their shareholders seem to be obsessed) it’s not a situation reflected among independent media buyers. Naturally, these businesses are not at the same scale as the holdcos. However, when talking to them, they suggest it’s a matter of principle (no pun intended).
“The reason I started my own agency was to have integrity,” said Taylor Fielding, CEO of Brisbane-based tfm.digital.
“It’s one of our values. If you’re transparent about your fee, then the client will trust you more, right? All of our clients are on pre-paid except three that are on post-paid because of the size of them, so they know exactly what it is. We can’t have the ability to go and do dodgy deals like that.”
“It’s transparency. I just keep coming back to it,” added Greg Oddy, founder of Oddy Media and former Australian national ice hockey player.
“A lot of my clients come from the direct side. As the direct teams around the country with fewer staff and fewer resources, they’re looking to streamline things… It’s just about them understanding where the dollars are going and how much of it is going to media.”
Loan Morris, founder and CEO of ABL Digital Media in Australia and 27 Degrees Media in France, has a unique perspective.
“Our ethos in Australia is based on the French one. Fortunately, or unfortunately, France has some of the most stringent laws when it comes to principal media,” she explained, perhaps ironic given Publicis’ current leadership in the space.
“[When I arrived in Australia] I was like what do you mean there’s no rebate? [In France] it’s called Loi Sapin and it was implemented in 1993 against corruption in advertising and media. When you buy media in France, I know it’s the same in some other countries, if you get a discount on a rate, you have to pass it on to the advertiser. The invoice does not go through the media agency, it goes straight to the advertiser. You’re obliged to only charge for your service, which is great, because that’s what I wanted to do—build an agency based on full transparency and transparency on rate.
“Transparency equals trust. I feel like with this [principal] buying model, you can’t have that unless you’re disclosing what the bulk-buy rate is and what you’re reselling at.”
Loi Sapin, to be clear, is not without its detractors. Way back in 1996, for instance, John Shannon, former president of Grey International, wrote in Marketing Week that the law had contributed to the demise of some 20 French media agencies and that it was driving down “agency remuneration to unworkable levels so that some media companies are finding it hard even to cover operating costs”.
In 2018 an updated Loi Sapin 2 law prevented agencies from buying and reselling digital media to clients. Media owners are also required to send invoices and detailed information about the services they performed directly to the advertiser. Non-compliance can carry fines of up to €300,000 for individuals and €1,500,000 for companies. Corporations can also be banned from the public procurement market for five years.
For Clinton Kay, GM at Five Dock-based Sweeney Advertising, the problem is only reserved for TV and, again, media should be traded with transparency.
“Sometimes you’ve got to just have a gut feel. It’s all well and good a new client’s signed aa booking. You need a media plan, whether you’ve built it with AI, none of that matters. That media plan just needs to match an invoice, that hits a PO, that goes to the bank and then they pay you. It’s a pretty simple process however you manage it. It’d be fun to have a look under the hood with holding and work in the CFO department for a month or two. It’d be awesome to see where half a point or one point on tens of billions of dollars per day works,” he said.
Clients lost in consolidation chaos?
If 2025 is set to be the year of anything, it’s agency consolidation (excluding AI, Trump-borne bizarreness, a Federal Election and the child social media ban, of course).
Earlier this year, Publicis acquired indie media agency Atomic 212°. It was a deal that had been mooted for a while, with some industry insiders telling B&T that Accenture Song had also been sniffing around the agency, though it is unclear whether the interest became anything particularly serious.
How the Interpublic and Omnicom mega-merger plays out remains to be seen. There will be plenty of client conflicts and it’s likely that the businesses will spend the next year or so focused on merging their own operations rather than on producing for their clients. It’s certainly a narrative that Sadoun and Read are trumpeting. Clemenger BBDO has absorbed CHEP Network—neither particularly play in media—but again, clients might be feeling left out. B&T’s been told that the top creatives at both agencies are unsure about their future.
“The Sweeneys are 10 years older than I am, I’ve been there a long time. They’ve got an idea that I’m not going anywhere. A business owner might want to retire or they’ve had enough so they want to cash out. There are some good stories, and there are some horror stories from the last five years of good indies,” said Kay.
“The poor clients are stuck in the middle,” said Morris.
“They will have to be reassured who’s looking after them. Is their account management team going to go because they’re merging? It’s really stressful for the staff to go through that too.”
Consolidation may make sense to service the very largest of clients, with scaled media requiring reams of customer data. Katya Vakulenko founder and MD of Soup Agency said that “some clients don’t need that level of complexity”.
However, the room felt that any supposed monopoly holding companies had over sophisticated tools had slipped.
“[They’re] getting more accessible, all those tools,” said Fielding.
“Give years ago when I started, it was like they’ve got all the big tools. But in the last three years, we’ve seen so much become available and it’s our job as the agencies in the independent space to make it more accessible to our clients so they don’t feel like they’re missing out or actually missing out.”
“If you’re pitching for something, you have to have a slide on tech,” added Kay.
“Some holding agencies would have 40 pages on it because they feel it’s the be-all-and-end-all. But that’s in pitching… We see it like when we were given the calculator in match class. We did long division one year and then the next you could do 75,000 divided by 62 with a calculator—you felt like you were cheating.”
It’s been speculated, too, that these tools could lead to the eradication of junior roles. This, again, is not something that the indies feel like they are experiencing. “I still want to work with people,” said Morris.
It’s easy, perhaps, to be seduced by the sky-high numbers at the top end of agency land. But, as is so often a refrain, it’s a people business—and there were good people in this room.
If you’d like to be part of the next B&T x IMAA Roundtable, email [email protected].
