The spate of mega mergers within the global advertising industry,
which began just before the world entered the New Millennium, underlines
the feeling that 'size does matter', especially now in the New
Economy.
The extent and scale of the mergers are highlighted by a single fact:
the top three networks now control more than two-thirds of the worldwide
market share.
But assuming that merger issues - like restructuring, streamlining and
so on - have been sorted out, in what direction are these monolithic
networks heading in terms of further development and competition?
The original aim of the mergers was for networks to consolidate market
share, have a greater talentpool of resources at their disposal -
ultimately to reach out for greater market control.
Nevertheless, none of these merged conglomerates has yet proven the
notion that 'a bigger size translates into bigger business'. From the
clients' viewpoint, there is doubt that they know or really care how
many sub-agency brands a network owns.
Account disintegration is happenning more often because of the advent of
the cyber communications era; an era in which clients are resorting to
more complicated marketing solutions and from more than one source.
Hence, enter the worldwide agency network offering every discipline
possible.
But as one agency executive pointed out, the mergers did not necessarily
result in a long term union as it was not unusual for these
relationships to end up in 'divorce' because of diverse cultural,
systemic differences and clashes among top management.
Undoubtedly, financial and logistical factors are the key reasons
driving both client and agency to work under a bigger and bigger roof
amid the search for financial and operational synergies.
The globalisation of brands is also causing clients to put their account
into a roster of agencies with the benefit of easier logistic control
and standardised communications strategy and execution.
