Remodelling Agency Structures

The word ‘restructuring’ sends shivers down the spine of anyone in the ad industry, not least because it’s often accompanied by redundancies: UK agencies lost 14 per cent of their workforce last year, the biggest drop since the IPA started reporting staff numbers two decades ago.

Beyond losing headcount, restructuring happens so regularly at some organisations that industry analysts interpret it as not waving but drowning. Maybe a nifty nip here and a tactical tuck there will reveal the growth so keenly sought by investors.

Trouble is, with so much effort expended in pursuit of the perfect org chart, there’s a risk that focus is taken away from clients. Because in spite of increased consolidation and automation, clients are, and always have been, faithfully fixated on results. Regardless of what’s happening structurally with their agency partners, CMOs need to keep demonstrating to their C-suite colleagues that they’re investing in marketing strategies that will generate a return.

The average CMO tenure is down to 40 months, so the insecurity of marketers is intensifying: they have to prove themselves in under three-and-a-half years. With so much heat on them to integrate, to automate and, ultimately, to deliver, they need the eyes of their agency partners firmly fixed on their marketing and commercial objectives, helping to steer them towards growth.

The shifting of the spotlight

After November 2025’s rubber-stamping of the Interpublic Group and Omnicom merger spawned a $25bn behemoth, it was WPP’s turn in the spotlight. In February, the holding company — whose share price has more than halved in the past year, from 631p on 11 March 2025 to 256p on 10 March 2026 — announced it was streamlining into four areas: Creative; Media; Production; and Enterprise Solutions.

Even as CEO Cindy Rose was unveiling WPP’s new structure, she acknowledged ‘transformation fatigue’. Controversially, Rose even said that she didn’t see WPP as a holding company anymore. She described it as “a single operating company.”

If WPP no longer sees itself as a holding company, that launches one mighty ball of confusion over what a holding company actually is. Rose has shared her vision of a collection of agency networks under one WPP-branded roof while at the same suggesting that all WPP’s agency brands will remain. Both can’t be true.

There was much hand-wringing when titanic names that had built up over decades, such as FCB and DDB, bit the dust in the wake of Omnicom’s merger with Interpublic. Yet casualties, both human and brand-shaped, are a fact of life after consolidation. As Claire Holubowskyj, senior research analyst at Enders Analysis, says: “They can’t maintain infinite numbers of brands while also trying to consolidate into a more cohesive offering.”

There are business risks associated with losing brands that pride themselves on being a hallmark of quality. As Oli Richards, chief growth officer of Saatchi & Saatchi and co-chair of the IPA New Business & Marketing Group, points out in his recent Creative Salon op-ed: “Agency brand is one of the few signals that still carries weight before the pitch even begins. When everyone has similar tools, capabilities and operating models, differentiation collapses. In those conditions, agency brands are not decoration. Brand is what allows clients to choose before spreadsheets start to blur… it’s difficult to preach the power of brands to our clients, while quietly dismantling our own.”

The new language

In this new world, where downsizing has become de rigueur, words like ‘integration’, ‘efficiencies’ and ‘scale’ pepper every conversation. Holubowskyj believes that, despite a more AI-driven landscape, this latest round of restructures is occurring for exactly the same reason that restructures have always happened. “While AI brings more questions than previous waves of consolidation, the business fundamentals and the structural changes are the same: it’s always about the efficiencies and technical capabilities to compete more effectively.”

This is why ‘supergroups’ sprang up in the noughties: global clients like Samsung, HSBC, and Vodafone were invited to cherry-pick their dream team from within one holding company. It's an intention that the holding groups retain, as they aim to bring their services closer together through internal mergers to induce potential end-to-end offers while promising access to their best people and tech. 

The shift to smaller players

The marketing consultant and M&A advisor Ivan Fernandes believes there are multiple forces that have put pressure on the holding companies. In fact, he thinks the holding company model has been broken for at least fifteen years, making this sudden burst of restructuring inevitable. “The numbers don’t look good. Tech, data and consultancy have all attacked different parts of the holding company model.” And there are new alternatives which are attractive to clients. “Private equity networks have come in with a different mindset about how they’re structured. They realised that time-based pricing meant that most clients realised they were paying huge amounts of fees and not seeing the value. There’s been a shift to smaller, more agile and more tech-driven players.”

One example is DEPT. Launched as an independent agency in Amsterdam in 2015, DEPT was snapped up by The Carlyle Group, a large global investment firm, in 2021. DEPT’s Global CEO Dimi Albers says: “We like to go client first as that’s how we’re organised internally. I’d urge any other services business leader not to fall into the trap of the endless internal reorg. Put all the focus into key clients: what are they asking from you and how can you organise to service them?”

Peter Reid, CEO of global marketing group MSQ, echoes this approach. “For me, it’s about aligning the best and most relevant people to work to solve a client problem. We try to see what problem the client faces and build a bespoke team with the best people. Senior people are critical in that mix.”

The Most Valuable Partners

Shifting client expectations is the main driver for restructures, thinks Yannick Bolloré. The Havas chairman and CEO proves it’s not just the DEPTs and the MSQs of this world who are re-engineering to be more client-led: “Brands want real business partners who can deliver outcomes quickly and coherently across the full customer journey. That’s why we’ve built a client-centric model that unifies creativity, media, technology and production.”

The French holding companies have clearly got their canards in a row: industry experts largely agree that Publicis Groupe shows how to pull off a successful restructure. Despite some wobbles, it’s now in rude health and has kept long-term clients such as Renault, which has been with the group for more than 60 years, and Heineken, which appointed Publicis in 2015. Both are regular winners on the awards circuit.

Publicis was quick off the blocks to adopt AI, launching Marcel back in 2017 and investing €12bn euros in data and technology over the past decade. Arthur Sadoun, CEO, said in early February 2026: “In this booming AI world, our ambition is to be the MVP… not the most valuable player, but the most valuable partner for our clients, our people and our shareholders.” He was speaking on an investor call to discuss Publicis Groupe’s full year results, which indicated 5.6 per cent organic revenue growth. Certainly, it had a successful 2025, picking up Coke North America’s media and data business, as well as global media for Mars. Both were giant losses for WPP that hit hard.

The next decade

What will the future model look like for agencies? Media analyst Ian Whittaker says: “The indies are doing well at the moment. In the next ten years, you can expect consolidation among the Stagwells and the Dentsu Internationals. But there may not be a huge amount of change otherwise. The bigger question at the moment is WPP’s future.”

Bolloré adds: “Market and investor pressure, especially around how AI may reshape agencies, is also reinforcing the need for clarity and durability in our operating model.”

And not all investors are looking at agencies kindly right now, particularly if they are seen to be lagging when it comes to AI capability.

Whittaker says: “Investors aren’t sure where things will be in seven years’ time: will agencies come out the other side? Or is this potentially something like the newspaper sector where it was disintermediated and the issues are structural? Agencies have a role but they need to change.”

The problem with the pivot

It’s a great paradox that, despite constant restructuring, change continues to be tricky territory for agencies. Reid, for instance, is dubious about Rose’s repositioning of WPP as an operating company: “It’s not easy for a holding company to pivot. The problem WPP has is multiple decades of experience of creating structures that don’t address structural divisions or incentives or people’s philosophies and mentalities.”

This hits on the cultural issue at the crux of restructures: taking people along with you is hard work. Albers at DEPT asks: “How do you make sure that, through this change, people feel at home and they’re winning and this is the place they want to commit to? You don’t want your rock stars to doubt that this is still their spot.”

Albers also flags that bringing companies together on one P&L post-merger is one of the biggest challenges following a restructure. Certainly, it took a year following Omnicom’s purchase of Interpublic, and the dust continues to settle.

And with the wider landscape in constant flux, it’s tough to make predictions. Holubowskyj says: “There’s no sense of exactly what winners are going to emerge because both the technologies and the conditions that underpin them are all changing at the same time.”

The one certainty is that restructures will continue (perhaps with more regularity) as clients’ expectations change. As Markus Noder, Serviceplan Group’s international CEO says: “How we work and what clients expect from us are evolving – our commercial models need to reflect that new reality.”