“Liberation Day” For Some, Ad Tax Day For Others. Plus Stagwell and Willful Optimism, Independent Agencies + Ads101 on Local TV/Radio Advertising With Janice Finkel-Greene
Madison and Wall: Saturday Summary for April 5, 2025
Will you be in Cannes for the Lions? Are you returning via Paris? If so, on Sunday June 22 (the Sunday following the Cannes Lions Festival of Creativity) we will be organizing another “chocolate marathon,” a nearly 26-mile path around Paris, France over the course of the day. To see a past route and get a sense of what it looks like, visit www.chocolatemarathon.com. If you would like to join in for some or all of the day please reach out and let us know.
First off, thanks to Ari Paparo and Eric Franchi for hosting me on the Marketecture podcast last week (always one of my weekly must-listens). You can hear my take on the advertising market in context of the consequences of US tariff policies and other factors impacting the industry.
As for our own productions, each week on the M&W Podcast, we discuss Madison & Wall’s latest research. On this week's podcast, our Advertising 101 series continues with a focus on local TV and radio buying with Janice Finkel-Greene, a former IPG executive and consultant to measurement companies.
This follows the past six weeks where we started diving into the role of agencies on Ep. 23 with Macquarie Securities' Tim Nollen, Ep. 24 with Heartmore's Carl Hartman where we focused on the function of the global account lead, on Ep. 25 on media agencies with Boston University professor Janna Greenberg, on Ep. 26 on media planning with Scott Wensman and Ep. 27 on media research with Stacey Schulman and Ep. 28 on national + CTV advertising with Todd Gordon. Our first six parts focused on marketers and how they allocate resources (you can listen to these interviews on episodes 17-22 of The M&W podcast).
You can also hear more about our work on agencies through the Agency Business podcast, a collaboration with FusionFront Media’s Olivia Morley. This week’s episode features Lisa Clunie, CEO of JOAN, a leading independent creative, production and influencer agency. It’s a fascinating deep dive into the business of the agency industry!
Weekly Work
We quantified the value of tariffs imported into the United States each year for key advertising categories including autos, pharmaceuticals, consumer goods, computers and electronics and foods and reviewed the different ways that different kinds of product categories’ advertising spending trends will be impacted
We looked at the specific impact from the end of the de minimis exemption and higher tariffs on Chinese exports on Amazon and Meta, both of which are highly dependent for advertising revenues from Chinese companies
We looked at recent trends on advertising spending from companies we call “digital endemics”, or those whose businesses are primarily rooted online. Many of them, including Amazon, Google, Booking.com and others are among the world’s largest advertisers and biggest clients of agency(es. Whether they return to growth or cut further is important for the growth of the overall industry
We calculated growth for the thirty largest independent agency groups during the first quarter of 2025. We estimate they grew by approximately 2% year-over-year
We wrote about Stagwell’s investor day from this past week, which featured a useful overview of the company but also a very optimistic outlook for the next five years
More Context
Stagwell hosted an investor event on Wednesday which featured what we can only characterize as a very optimistic outlook for its own business with sustained 9% organic growth over the next five years. Paired with some inorganic growth, this would be intended to put the company on a path towrads generating $5 billion in revenue during 2029. To be sure, Stagwell has some very solid assets including the highly regarded agencies Anomaly and 72 and Sunny, but the bulk of the business is generally exposed to the same gravity that holds down the rest of the industry at low single digit levels. Short of massive new investments in people and processes that would go well beyond anything highlighted during the investor day and outside of inflation-driven eras, we can’t think of a situation where a scaled agency group has grown organically by as much for so long.
At least the willful optimism might be consistent with Stagwell’s CEO’s remark that Wall Street had to that point expressed an “exaggerated reaction” to expectations around tariffs. This was after the S&P500 fell 10% from February’s peak, but before the next 10% fall that occured over the following two days. The likelihood of meaningful growth for the economy in the wake of the government’s new trade policies and an agency holding company growing 9% organically over the next five years are probably very similar.