?? The Creativ Brief: Why is Advertising Consolidating?

This week IPG and Omnicom, the two largest U.S. agency holding companies, announced their plans to merge into a single entity.?

The combined company would have revenues exceeding $25 billion dollars, making it the largest advertising services firm in the world. The firms purported savings of $750 million from the deal.

Meanwhile, private equity firms like Carlyle group, ZMC, Bridgepoint, and CVC have bought respective agencies Huge, Wpromote, Equitiv, and Mediaocean.?

Our own little firm, combined with data science and AI firm talkAItive, to build out bespoke research and reporting products.?

The idea behind consolidation is to create theoretical cost savings and stickiness with scale.

To deliver cost savings, consolidation allows for previously independent firms to share business operation expenses like legal, accounting, operations, overhead, office space, and marketing. The downside is shared operations necessitates redundancy as a firm doesn’t need two marketing, accounting, and operations departments. This is the most common reason for layoffs post mergers.?

To build stickiness, consolidation merges revenue from various accounts that the previously independent firms owned. If each firm had complimentary service lines, the business can cross sell services and deepen account relationships by selling more services. This is a win-win for both the consolidated firm and clients as it creates a single point of contact for more diverse services.?

Consolidation comes with risks, most notably to quality of service. Cuts to merged client service teams can create larger workloads for remaining employees which reduces the quality of service provided to clients. In addition, new organizational structures can create friction in teams with jarring management changes.?

Unthoughtful mergers with uncomplimentary products like AT&T and WarnerMedia or General Electric and Healthcare Insurance manifests as poor experiences for clients, increased debt burden for companies, and decreased value. In the extreme, Boeing’s reverse merger with McDonald Douglas led to massive quality degradation as senior staff were released, resulting in catastrophic plane failures and the deaths of hundreds of passengers.?

The rewards for success are cost efficiencies, larger client accounts, and product stickiness. The downsides of failure result in poor quality products, internal strife, and business implosion.?

Consolidate with caution.

3 Stories Dominating Media and Tech Headlines

Omnicom and Interpublic, two major players in the advertising industry, have confirmed their merger, creating one of the world's largest advertising conglomerates. If successful, the merger will consolidate resources, offering integrated services while likely increasing competitive pressure on rivals like WPP and Publicis.

Why it matters: In the bigger picture, this move shows how companies are coming together to adapt to changes in advertising and digital media.

TikTok's parent company, ByteDance, has asked the U.S. Supreme Court to pause a law mandating the sale or banning of TikTok in the U.S. by January 2025.

This follows a lower court ruling that upheld the law, citing national security risks due to potential Chinese government access to user data and influence over the platform’s algorithms.

Why it matters: If enforced, the law could significantly impact international tech ownership and regulatory practices, signaling a shift in how countries address foreign control of digital platforms.

Epic Games has been ordered by the Federal Trade Commission (FTC) to pay $245 million in refunds to affected players of its popular game, Fortnite.

The penalty stems from claims that the company used misleading interface designs to prompt unintentional in-game purchases and made canceling transactions difficult for users.

Why it matters:? This ruling highlights the increasing scrutiny over consumer protection in the gaming industry and signals that regulators are cracking down on predatory monetization practices across digital platforms

Creativ Spotlight - NHRL Championships!

After 7 qualifying tournaments to get to this pivotal point, the NHRL World Championships have officially concluded!

Congratulations to the champions who claimed the Golden Dumpster in their respective weight classes this past weekend!?

You can stream the entire World Championships here on YouTube.

Stat of the Week - Regional vs Global Advertising Growth: 2025

North America will lead global advertising growth in 2025, contributing 38.4%, followed by APAC at 33.3%, with Europe and Central Asia at 22.4%.

GroupM forecasts global ad revenue will exceed $1.1 trillion, driven by digital advertising, which will account for over 80% of the total, including key contributions from streaming TV and retail media.

This signals a rapid growth in digital and streaming channels, pushing advertisers to prioritize innovation and diversification to capture opportunities in emerging ad formats and regions.

One Fun Thing - Destination Weddings

One of my closest friends Ben Oliver, buddies since riding the bus together to Middle School at age 11, is getting married this weekend. Hundred guests descended on Spanish-style town Antigua, Guatemala, the historical colonial seat of central America. Congrats Ben and Aspen!