A couple of big news stories have hit the agency community in the past few weeks. First, Edelman decided to lay off more than 300 employees. Then came reports that two of the biggest agency holding companies — Omnicom and IPG — plan to merge.
After a couple of tough years for many agencies, this news has created new concerns for agency owners.
Are these developments merely a response to the tough times behind us or an early indicator of what lies ahead for agencies of all stripes and sizes?
I’ll dig into this a bit more later in this week’s newsletter, but first let’s take a look at what Jen has rounded up for us this week.
— Chip Griffin, SAGA Founder
Weekly Roundup
Below are some articles, blog posts, podcasts, and videos that we came across during the past week or so that provide useful perspective and information for PR and marketing agency owners. While we don’t necessarily endorse all of the views expressed in these links, we think they are worth your time.
— Jen Griffin, SAGA Community Manager
Latest from SAGA
- Agency owners need to put themselves in other people’s shoes (Agency Leadership Podcast)
Articles & Blog Posts
- 5 Ways to Activate Your New Business Toe (RSW/US)
- Hiring your next COO: 12 must-ask Reference Check questions for agency leaders (Sakas and Company)
- When to Make Better Decisions (Punctuation)
- The Power of Online Communities (Spin Sucks)
- Keeping Clients Off The Naughty List | A Holiday Guide (Bureau of Digital)
- What does it mean to make people better? (Anchor Advisors)
Podcast Episodes
- The Communicator’s Guide to the 2025 Earned Media Mosaic (Spin Sucks)
- Inside Superdigital’s “Anti-Agency” Approach With Biz Hennigan (The Marketing Agency Leadership Podcast)
- Agency Growth Made Simple: Trust, Teamwork, and Execution with Tim Kelsey (The Digital Agency Show)
- Spark Agency Growth by Stepping Away, with Jennifer Filzen (The Innovative Agency)
- Keys to Becoming a Profitable Creative, with Patrick O’Connell (The Agency Profit Podcast)
- Key Lessons from Tiny Businesses that Made Big Moves (That Solo Life)
- Karl Sakas on Navigating Agency Growth and Exits and Calming the Chaos (The Digital Agency Growth Podcast)
Videos
- Account growth, hourly vs. fixed pricing, and speeding the sales process (Sakas and Company)
- Year End Tax Strategy (Agency Management Institute)
AI in focus
- AI Tools Streamline Business Building Processes (Solo PR Pro)
- How AI Insights Create More Valuable Client Reports (AgencyAnalytics)
- Transforming Agency Sales and Marketing Using AI with Andrew Eklund (Smart Agency Master Class)
A time of turmoil for agencies?
How should small agencies be viewing the Edelman layoffs and the Omnicom-IPG merger? Is it a sign of more trouble ahead or simply a few giant firms dealing with the issues unique to their circumstances and size?
There’s no question that the past couple of years have been tough for many agencies. The latest SAGA Owner Survey suggests that most believe that rosier times lie ahead, but these recent news stories have some of those owners second-guessing their optimism.
I think it is important to put both news stories into perspective, however.
Edelman has gone through a couple of cycles of expansion and contraction in recent years. Their sheer size forces them to deal with challenges differently than many other agencies — and any news they create (good or bad) takes on outsized importance.
In the case of Omnicom and IPG, the holding company model has shown signs of distress for years now. I would argue that it was never really a great idea and that time is simply proving the point.
These two large players have decided that the solution is to come together and form an even larger holding company. In my view, that’s a bit like partners in a failing marriage deciding to have a kid to solve the problem. It’s likely to create even more issues and never solve the underlying one.
Having now made the case that Edelman and Omnicom-IPG have the characteristics of outliers, I will now explain why small agency owners should still care about the news.
There is no doubt that the business community — like many individuals — still suffers from economic anxiety. Budgets have not expanded significantly so the pressure on agencies continues largely unabated.
Edelman was able to hold off on downsizing, but many small agencies have already reduced headcount through attrition or layoffs this year. The sentiment seems to be that the right-sizing has largely been completed, however, with most small agencies not expecting to trim further unless conditions deteriorate significantly.
The holding company news, on the other hand, could open the door to more significant changes for small agencies.
As many of the holding company agencies go into a bit of a holding pattern while waiting for the merger to be completed (assuming it is not blocked by regulators), the door could open for small agencies to win pieces of new business, especially from clients concerned about what the merger might mean for them.
On the flip side, senior executives at many of those holding company agencies may elect to jump ship before the massive post-merger cost-cutting begins. That could lead to a sudden influx of talented, well-connected agency veterans hanging out their own shingles and competing for business.
Ultimately, small agencies should focus most on the dynamics within their own target market and client base. While it is helpful to take note of big picture news items like Edelman and the holding company merger, they should be treated as clues, not instructions.
So keep your ear to the ground, look for opportunities that may arise, but don’t allow yourself to become too unsettled by dramatic headlines.
