Platform aspirations, legacy limitations: the agency holdco dilemma 

But the idea that they’re about to shed their old holding company identity? Wishful thinking. Yet it’s a myth that won’t die, enthusiastically recycled by holding company CEOs for years.

Earlier this month (Dec. 9) there was another comeback with an announcement Omnicom’s plan to acquire IPG. To win the market, both CEOs leaned heavily on the “agency as platform” narrative and pitched their proposed mega-group as a platform. They talked about the need to embrace software-as-a-service features and emphasized the importance of tooling, framing the merger as a game-changing end-to-end marketing platform.

Vision: better client outcomes through technology and data integration, accelerated innovation and top-level service. Reality: shiny branding as usual

That may sound harsh—after all, even the CEO didn’t get a chance to prove the plan. But the skepticism is rooted in a long history of broken promises and empty visions from the Holdco c-suite.

Investors seem to agree.

Omnicom shares fell 10.47% in the week since the deal was first announced. True, IPG’s stock has fared better (up 10%), but that rise feels more like a nod to its standalone prospects than a vote of confidence in the merger’s transformative value.

“Agencies as a platform business is a busy thing, but there is no standard definition of the phrase,” said Joe Maglio, CEO of digital creative agency Barbarian and president of Cheil North America.

And there’s the twist.

“Agencies as a platform” seems more like a myth – vague, overhyped and rarely tied to reality. Yet the myth persists, fueled by the tension between the aspiration and duty of holding company CEOs. They dream of being innovators but are shackled by the demands of running a publicly traded company: chasing size, appeasing shareholders and hitting quarterly targets. In an effort to be everything—innovative yet predictable—they end up stuck in the middle, selling stories that don’t quite hold up.

Tough business when you’re fighting for ad dollars.

Take GroupM for example. Its platform play relies heavily on media buying influence, but it’s still more of a pipeline than a platform. Havas talks about integration between data and content, but it doesn’t differ significantly from traditional agency models. And Dentsu? The company leans heavily on its consulting and technical data, but is still trying to escape its agency roots.

Of course there are outliers.

Publicis Groupe stands out as the most credible bidder. While still far from perfect, the group has pushed its platform further than most, investing heavily in technology and data through moves such as the acquisition of Epsilon and its “Power of One” model. Even his critics admit that he is closer than others to making the myth a reality.

“Publicis has done a great job of making Epsilon and its technology industry central to its success story,” said Charles Ping, managing director of Winterberry Group. “How well it actually integrates with the agency’s broader offering remains to be seen, but it’s clear that they can demonstrate that they have a media and data view of the world that some of their peers are attempting with varying degrees of success.”

Yet Publicis remains rooted in the core elements of the advertising industry: billions in media and creative services. Data and technology, which includes its multi-platform offerings such as Epsilon and Publicis Sapient, accounted for a third of the group’s revenue last year. Impressive? Clearly. But not transformative. Publicis, like its peers, is still navigating the gap between platform potential and legacy reality. And the gap remains huge.

To understand how wide this delta is, compare Publicis’ performance with Accenture Song’s. The advertising arm of the consulting firm generated revenue of $19 billion for fiscal 2024, up 7% from the previous year. Publicis, on the other hand, reported revenue of 10.1 billion euros ($10.5 billion) for the first nine months of 2024. The contrast is striking and underlines how far traditional holding companies still have to go.

The gap looks even more pronounced when we look at Accenture Song’s ability to use technology as a growth driver. For example, generative AI accounted for $3 billion in reserves during Accenture’s last fiscal year, signaling its future revenue potential. These bookings represent not just interest, but commitments to major projects – a testament to Accenture’s ability to deliver transformational opportunities.

For holding companies still rooted in old structures, it’s clear: transformation requires more than ambition or rebranding. It requires a complete overhaul of the business mode. Accenture’s success with generative AI shows what’s possible—and underscores how far traditional agencies have to go.

Here’s the big difference, according to Jared Belsky, CEO of independent agency Acadia. Platforms work because they are scalable, repeatable and unified. Everything they do is collected, quantified and supported by self-service software, he continued. This is what scales effectively.

On the other hand, agencies aren’t running it yet—not in any meaningful sense. Their work is anything but repetitive. If anything, it depends on individual briefs, account directors and ad hoc teams, resulting in a billion different ways to answer the same brief. Scalability depends on adding headcount, Uniformity? Rarely. And self-service? That doesn’t exist.

To achieve all of this—scalability, repeatability, uniformity, and self-service—agencies would have to break away from the very practices on which they were built. The question is, can they? Or are they too entrenched in old habits to evolve into something new? So far, the answer is leaning towards the latter.

Belsky outlines three essential things agencies must do to even come close to a platform model:

Hire consultant-like managers: Agencies cannot change unless their leaders think in a more process-oriented way.

Downsizing: Becoming more process-oriented means relying on systems and technology rather than sprawling teams, which will require a shift in mindset across the industry.

Redefine the DNA of the industry: Agencies need to move beyond their short-hand improvisational nature to embrace scalable and tech-based solutions that deliver consistent results.

Bottom line: For agencies, breaking the platform myth isn’t just about ambition, it’s about redefining everything they do.

“If agencies want to become a platform, they have to become inevitable, and the only way they can realistically do that now is probably through principled media,” said Chris Novak, chief operating officer at media consultancy Eden Collective.