• by Joe Mandese  @mp_joemandese, December 10, 2024

The combination will bring together unmatched talent, services and products, and platforms. Omnicom will have the deepest bench of marketing talent, with over 100,000 practitioners. -- Omnicom CEO John Wren

There was a lot to listen to in Omnicom's and Interpublic's acquisition announcement Monday morning, but that line stood out like a sore thumb for me. Not just because Omnicom chief John Wren has been championing AI in recent investor calls as a means of automating the manual inefficiency -- you know much of what many of those 100,000 practitioners do -- of the ad biz, but because we now had a benchmark for the size of the labor force of what will be the world's largest agency holding company by a wide margin.

So, I researched current estimates for the size of the advertising agency labor pool, and found that it currently is about 2 million people worldwide.

In other words, the new massive agency holding company created by Omnicom's acquisition of Interpublic will represent less than 5% of the global agency workforce.

I've done a number of analyses in recent years showing that the agency business -- especially its role in media planning and buying -- is an increasingly long-tail one, because big digital platforms have enabled the proliferation of many more small, medium and some pretty big independent agencies into the game, not to mention much more direct media-buying from small, medium and not-so-small marketing businesses themselves (but that's another column).

The first time I analyzed the Big 6 agency holding companies' share of ad spending was back in the early 1990s, when I was media editor at Advertising Age, and I used its annual agency billings data and divided it by McCann-Erickson Forecaster Bob Coen's and found the Bit 6 were less than half of U.S. and/or worldwide media spending.

When I updated that stat recently, they represented less than a quarter of media-buying.

That long-tail analysis, of course, focused on the output: ad spending/media-buying. But if you look at the input -- the people responsible for that output, the Big 6 are an increasingly smaller share of the agency workforce, due largely to their economies of scale, not to mention increasing utilization of technological automation, especially AI in recent years.

Listening to Wren make that statement, I also thought about something OpenAI chief Sam Altman has been quipping about recently -- that there soon will be 10-person, $1 billion companies thanks to AI, and that he and his tech buddies have been making side bets about when the first one-person $1 billion company will happen.

As much as that prospect raises big questions for agency account managers servicing a client of one, it made me wonder how many of those one-person or 10-person companies might be planning and buying billions of dollars in media.

Needless to say, both Omnicom and Interpublic management have downplayed the impact technological automation will have on their workforces in the near, and not-too-distant future, making the case that AI will actually create more jobs, and ostensibly more rewarding ones for agency staffers. Yeah, right.

In closing, I'll leave you with the second part of Wren's quote, which explicitly acknowledges the deep investments both Omnicom and Interpublic have made recently in tech.

The post-Interpublic acquisition Omnicom "will have the most complete offerings across media, precision marketing, CRM, data, digital commerce, advertising, healthcare, public relations and branding. These services will be underpinned by Omni, Interact, Acxiom, and Flywheel, a combination that will effectively position the organization to thrive in an AI-driven future."

And while the Big 6 consolidate into the Big 5 -- and presumably, something even smaller than that -- keep in mind that there currently are an estimated 433,400 ad agencies in the world that they also are competing for talent with.

Who knows, maybe you'll be the first to launch a one-person $1 billion media shop, thanks to Sam Altman and his friends.