DBB is Omnicom’s 76-year-old advertising and communication network. By the end of 2025, Omnicom Group and Interpublic Group plan to merge. Omnicom Group, it is rumored, may phase out the legacy DDB agency, at least in some countries.
DDB defined advertising in the latter part of the 20th century with memorable work on brands such as Johnson and Johnson, McDonald’s and Volkswagen. Omnicom is seriously considering the very best solutions for the future.
It is an issue that affects the entire ad industry. Are global legacy agencies on the way to being extinct? Just two years ago WPP terminated Wunderman Thompson brand. Publicis and Leo Burnett would form Leo entity.
Legacy agencies flourished on the basis of the differentiating factor — creativity. These days there are many competing creative agencies. Besides creativity, agencies now require speed, data fluency and measurable business outcomes. Legacy agencies have just one attribute – their heritage.
Mergers are attempted to simplify the complexity of the structure of legacy agencies. A merged entity should have a single powerful value proposition. There is an identity crisis for the ad firms. The creative agencies are getting transformed as a network. They lose in the process their creative personality and become a service bouqet. People drawn from finance would like to create a profitable merged entity. This process wipes out the creative cultures. Marketers will have to choose their agencies very carefully.
There is also an issue of clients asking for spectacular results from creative agencies, but without increasing the budgets. Clients transfer the key projects to independent agencies, and routine work to retainer agencies. It is tough on both kinds of agencies.
Network agencies have an advantage — delivery at scale. But this has also become a weakness in current marketing environment. There are shrinking revenues. Network agencies are, therefore, compelled to scale down.
Advertising is making a shift to performance marketing. Creative agencies excelled at brand building. New age advertisers give utmost priority for performance marketing. Brand building takes a backseat.
Creatives may win the hearts. But they should learn to win the wallets. What is needed is new creative thinking. The thinking must look impressive both on reels and paper, and at the same time, must also improve business metrics.
Advertising is through reinvention. AI has already taken over the grunt work. Consultancies have business credibility. In-house creative teams are producing routine creative work at speed. Agencies have to evolve, or else they will be converted into museums or production shops. Ceativity must earn its right to sit in the boardroom.
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