Sunday, November 24, 2013

20. Holding Companies

Before a recent lecture in my Creative Strategist class, I thought advertising agencies were completely independent. Then, I learned that there is, in fact, a handful of independent agencies, like Weiden+Kennedy or Droga5, but the majority of agencies belong to huge holding companies. A holding company is a parent corporation that owns enough stock in another company to control its policies and management. Although such increased control may sound like a negative aspect, there is a number of benefits that agencies receive when they get adopted by a holding company. For example, holding companies ensure the agencies' financial stability and give them the ability to be partnered with other big agencies. 

There are six major holding companies in the advertising industry: 

1. WPP (owns Ogilvy & Mather, JWT, etc.)

2. Omnicom Group (BBDO, DDB Worldwide, etc.)

3. Publicis Groupe (Publicis, Leo Burnett, etc.)

4. Interpublic Group (Campbell Ewald, MRM Worldwide, Huge, etc.)

5. Project: Worldwide (Partners+Napier, Juxt, etc.)

6. MDC Partners (72andSunny, Crispin Porter + Bogusky, etc.)

Browsing through the news about holding companies, I found that Publicis Groupe and Omnicom Group have recently agreed to merge, creating the world’s largest advertising company with $23 billion in revenue and thus toppling WPP. However, the merge may be pushed back into the second quarter of 2014 due to some regulatory approvals in Russia and the EU.

I also found a cool infographic that gives a good sense of the current holding companies' structure and provides some historical and factual context. Besides the aforementioned companies, the infographic also includes Havas and Dentsu, which are a little smaller, but still could be included in the list of major holding companies.

 *Click on the link below the picture to expand it.

Click on this link to expand

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