Omnicom's Big Bang Sequel + New Google Ad Tech Disclosures Analyzed
Madison and Wall: Saturday Summary for August 31, 2024
For a sleepy week in August ahead of Labor Day, there was some very eventful news for advertising industry wonks.
We wrote about two important items, including one issue at the very heart of the modern advertising agency industry. Omnicom, founded in 1986 in a “Big Bang” centered around three of the world’s most important traditional full service global advertising agencies, BBDO, DDB and TBWA, brought its flagship brands closer together than ever with this week’s announcement of a global Omnicom Advertising Group. As we noted, this action effectively centralizes businesses that had otherwise operated with much more autonomy and independence than most of its global peers. The shift towards centralized, monolithic creative agency services businesses with singular brands (or at least diminished sub-brands) started to look inevitable a decade ago, and with Omnicom, Publicis, Dentsu and Havas broadly moving in similar directions, it seems more likely than ever to serve as the global industry’s dominant form.
In a separate note, we published an extensive analysis of information contained within new court filings produced ahead of Google’s ad tech antitrust trial which will begin on September 9.
One topic we focused on in our work related to incentive programs that were active around 2018. Many of the narratives we came across around the release of these documents had negative connotations, but our take is much more nuanced. Among other findings, it’s notable that advertisers were the primary drivers of growth for the incentive programs. When it came to agencies, not only were commitments not mandatory, but agencies didn’t meet their incentive goals. More importantly for those concerned about the topic of rebates and media transparency, none of the documents we reviewed conveyed anything about agency-marketer contract compliance or a lack thereof, which his ultimately the critical issue agencies and marketers should concern themselves with.
A separate topic we reviewed related to the revenue and profit profile of the company’s ad tech business circa 2020. As Google has not disclosed this information in its investor communications, it was particularly useful to those of us who have looked to triangulate various data points in order to assess the company’s market share and its competitive position relative to The Trade Desk, among others.