Commentary

6 Reasons I'm Bullish On Independent Agencies In 2025 And Beyond

  • by , Featured Contributor, January 23, 2025

I am a close watcher of the agency business in the U.S., and am very big on independent agencies in 2025 and beyond. Here are my six reasons why:

Close to clients and their needs. First and foremost, independent agencies are much smaller than holding company alternatives, operating in flatter, founder-led organizations with few or no layers between top agency talent and the clients that they serve. They don’t just know the “media client” or “brand client,” but generally know client CEOs, founders, heads of sales and most of the top executives. Plus, independents' distribution across the U.S. guarantees closer real proximity to their clients and their businesses.

Massive range and diversity of capabilities and scale. Independents range from billion-dollar media independents to specialists to JAGs -- “just a gal” and just a guy” microagencies. Unlike holdco alternatives, they don’t have to deliver their services in one-sizes-fits-all boxes, which means that mid-sized clients and smaller brands can find agencies that fit them, and don’t need to fit their needs into large, inflexible offerings.

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More focus on mission and less on Wall Street. Very few independent agencies in the U.S. are public, so stock price and earnings calls aren’t the heartbeats that they operate on.

Yes, many will eventually want financial exits for their owners and investors, but that doesn’t have to mean they will mimic the business models and approaches of today’s holdcos (which aren’t particularly in Wall Street’s favor) to do that.

Momentum is on their side, and CTV advertising could be a power boost. Independent agencies are growing. Top industry analyst Brian Wieser of Madison & Wall’s reports tell us that “the 30 largest independent, privately held agencies showed incremental gains in employment -- and implicitly, revenue growth -- on a like-for-like, pro forma basis” during most of 2024.

And, in response to Roku’s 2025 prediction that 20,000 new small and medium-sized businesses are poised to enter the CTV ad market, Wieser cautioned that this would probably happen over time, not at once. He was generally optimistic that this could be a realistic outcome over time and noted there are 20,000 U.S, businesses spending $500,000 annually on advertising that don’t spend on TV today. This could be a real boon to independent agencies, since many of those brands and businesses will need help.

Holdco competition can’t compete or properly serve 90+% of growth brands today, and have no ability to help the 20,000 small and medium-sized U.S. businesses that will be new CTV advertisers. Holdcos’ maniacal focus on costs, principal-based media and global forces aim to help their biggest clients, to the expense of all others.

AI is a force multiplier and equalizer. (Of course this column needs an AI reference!) AI is going to help those who avail themselves of it, not those in companies that try to make it a command-and-control exercise from the top. I will bet on  small agencies to do AI better and faster than holdcos.  Independents led the way when it came to embracing desktop publishing in the ‘80s, the Internet in the ‘90s, and video streaming in the '00s. They will do it again for AI.

What do you think? Bullish on independent agencies in 2025 and beyond?

4 comments about "6 Reasons I'm Bullish On Independent Agencies In 2025 And Beyond".
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  1. R.J. Lewis from e-Healthcare Solutions, LLC, January 23, 2025 at 7:01 p.m.

    I like this prediction.  I think Holding Cos. face a host of challenges from their overall business models to short client loyalty spans, to non-competitive fee structures, to lack of trust with clients due to lack of transparency w/in their trading desks.  There are a lot of headwinds... perhaps why they are out of favor with Wall Street.

  2. Ed Papazian from Media Dynamics Inc, January 23, 2025 at 8:45 p.m.

    Dave, many of the larger advertiing brands are, themselves, components of huge marketing holding companies which have gobbled up numerous once independent brands for exactly the same reason as the agency holding companies gobbled up agencies, merged and purged, etc---to exploit the economies of scale and keep growing to impress Wall Street, investors, etc.It's much easier---and less risky---to acquire existing business that are viable than starting new ones---and both sides know it.

    So the advertisers are equally quilty---if one makes the assumption that it's the responsibility of the big shots in their corporate suites to interact with--or micromanage----  each brand and the agencies it has hired to do  account handling, marketing, research, media and sales promotion work. That's not what happens in the real world. When there's a problem at the brand or division level it's usually those directly in charge who are the cause---or the cure---not the ivory tower guys.

    My point is that if the great improvement everyone dreams about is to come about, it will be more of a collective and evolutionary affair, benefitting various brands and agencies with others taking note and  and trying  to emulate  what seems like a  successful new approach. Is this wonderful transformation--- focusing on "the mission" and less on Wall Street----going to happen? Probably not as those playing the two games--- and the rules they play by---- are very different. The marketing and the agency holding companies will get bigger and bigger as the big wigs have no other choice. Which means that the improvements we wish for in the advertising and media functions will  need to develop mostly at the operational level. There's where some of the independent agencies may come up with some---or many--- of the good new ideas and applications---but to have a meaningful effect these will have to migrate to the larger brands and agencies as they control most of the money. That may take time.

  3. Dave Morgan from Simulmedia replied, January 24, 2025 at 5:52 a.m.

    Totally agree RJ!

  4. Dave Morgan from Simulmedia replied, January 24, 2025 at 5:54 a.m.

    Ed, you and I are on the same page here. I am not blaming the holdcos entirely for the poor state of their abilities to serve broad sets of clients today. They made pacts with large global marketers and focused heavily on cost efficiencies rather than advertising effectiveness and sales growth. But, that is the bed that they made and they are not able to compete with indepdents in the mid-market, which is where the industry growth is going forward.

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