Make Some Noise: The M&A Surge Forcing Advertising's Bold Future

Mergers and acquisitions (M&A) in the advertising world are rarely straightforward. One M&A consultant tells a striking tale: an agency owner, frustrated by prolonged negotiations, placed a shotgun (yes, the real kind!) on the meeting table before signing the contract — a dramatic reminder of the high stakes at play.

The reality is that both sides seldom walk away with everything they want. As AI reshapes the industry and creativity becomes more democratised, striking a good deal is increasingly complex. Yet, opportunities abound, with consolidation and innovation driving a flurry of activity in the advertising market. The impending $13 billion Omnicom takeover of Interpublic Group (IPG) is poised to reshape the advertising landscape, setting off ripple effects for not just its competitors but also its clients. As this colossal merger unfolds, independent agencies may see their valuations rise while rivals scramble to recalibrate strategies. This transformation comes amid accelerating AI adoption and the rise of the creator economy — forces already fuelling M&A trends.

Sometimes, however, the focus of these deals shifts away from acquiring tech solutions to investing in creative talent that delivers a compelling competitive edge. Recent deals for New Commercial Arts (acquired last year by WPP-owned Ogilvy) and Uncommon Studios (Havas acquired a majority stake in the agency in 2023) reflect that creative talent is still the primary driver for the industry. The move towards inevitable consolidation in advertising is expected to see more fresh start-ups in response. There is already a rush of excitement caused by the highly-regarded duo Richard Brim and Martin Beverley announcement late last year that they are leaving adam&eveDDB to start their own business.

As the decade unfolds, the contours of the industry’s future are becoming clearer in some respects, though uncertainty lingers elsewhere. Agencies will need to invest heavily to stay ahead of technological advances and evolving client demands. For WPP — long the largest network — losing that crown to a soon-to-be merged Omnicom-IPG presents a pivotal moment. Meanwhile, Publicis Groupe, riding on years of consistent growth, remains a model of adaptation. Moreover, the same quandary is true for the mid-size networks and agencies including the BrandTech Group (which loathes to be labelled as such), Stagwell and others.

Connected commerce is meanwhile fast becoming another burgeoning frontier. Retailers are leveraging e-commerce platforms to bridge online and in-store experiences, unlocking new advertising revenue streams. Agencies with the expertise to orchestrate these complex ecosystems are poised to become highly coveted assets.

Meanwhile, media is still the significant battleground for most advertising networks, as highlighted by the buyout of Total Media by longterm strategic partner MediaPlus, part of the Serviceplan network.

The question for holding companies, therefore, is whether to buy, consolidate, merge, or build.

For instance, VML’s merger with Wunderman Thompson in 2023 exemplifies the push for scale and integrated services. Pip Hulbert, VML UK’s CEO notes that clients are more commercially focused than ever, driving restructuring across both brands and agencies alike. And as the industry races towards 2030, change remains a certainty.

What deals of today tell us about the industry of tomorrow

As the Truelink Capital deal to buy R/GA shows, private equity (PE) is playing an increasingly prominent role, stepping in as agency networks shift focus to scaling tech capabilities. That follows the sale of its former stablemate Huge to another PE firm, AEA Investors in December.

According to Moore Kingston Smith, 2024 saw 393 M&A deals, the lowest since 2021, with PE-backed firms like MSQ, Croud, and Brainlabs flourishing under this model. For networks, the challenge becomes balancing internal consolidation with the need to stay nimble. Of ‘The Big Six’, Havas and Publicis Groupe were the most prolific buyers in the market with six each, followed by Omnicom with two and WPP with one (although it did also buy out the remaining shares of T&Pm as well as acquiring New Commercial Arts).

The era of agency networks as the dominant buyers of independents is fading. Private equity firms are now leading the charge, snapping up promising agencies while networks pivot towards scaling their tech stacks — transforming into tech-driven powerhouses rather than purely creative collectives.

“The advantage that the networks have, and the challenges, is that the amount of money that they can deploy on AI is significant. They're all investing hundreds of millions into it. That’s going to be a make-or-buy decision,” explains Paul Winterflood, Partner and head of media M&A at Moore Kingston Smith.

Winterflood points to success stories like MSQ, Croud, Brainlabs, and Dept — agencies that thrived under PE ownership, scaled rapidly, and sold for profit. With firms like LDC and Living Bridge gaining a knack for navigating the ad world, it's likely they’ll return for more.

This shift signals a change in ambition for start-ups. The goal isn’t necessarily to build with the hope of being absorbed into a giant network. Instead, there’s growing momentum for independents to carve out their own space — and thrive without an inevitable acquisition.

For networks like WPP, the focus has shifted towards consolidation, streamlining services to offer clients everything under one roof while achieving global scale. It’s a strategy that isn’t slowing down anytime soon.

According to VML's CEO Hulbert, the Omnicom and IPG merger is only a precursor to a larger movement. Brands are craving not just scale, but cohesion. “That's because they're looking for a partner who understands how to join everything together. At VML, we talk about connected brands — that’s becoming part of the day-to-day language and in the vernacular of our clients because they recognise that everything's got to be joined up to maximise that outcome. We are all trying to grow our businesses from a revenue perspective, but I don't think it's about making them sizable in terms of doubling our size of headcount. You're still going to have a lot of people in the mix, and their roles will change as well.”

The future of advertising is shaping up to be less about sheer size and more about synergy — with the networks that can seamlessly connect tech, data, and creativity poised to lead the charge.

Does the Publicis Groupe model lead the way?

While the spotlight might shift to Omnicom and IPG in 2025, Publicis Groupe, under global CEO Arthur Sadoun, has consistently been setting the pace for the industry, crafting an offering tailor-made for brands in the connected age.

Its M&A strategy reads like a playbook for modern marketing dominance: connected retail and retail media, cutting-edge data capabilities, AI-driven tech, and influencer agencies. This razor-sharp focus has paid off, with Publicis Groupe clocking in an impressive 5.8 per cent organic growth and outpacing its competitors for the sixth consecutive year.

February saw the company scoop up BR Media Group, Latin America’s leading influencer marketing and content powerhouse, with a creator network over 500,000 strong. The acquisition links seamlessly with Epsilon — Publicis’s record-breaking purchase — and its best-in-class identity graph, further supercharging the Groupe’s connected ecosystem.

This wasn’t a one-off move, either. Last year, Publicis acquired Influential, an AI-powered platform boasting a staggering 4 million influencers and covering 90 per cent of creators with over a million followers. It’s clear that Publicis isn’t just buying companies — it’s buying reach, relevance, and cultural currency. And earlier this year he brought together Leo Burnett and Publicis Worldwide under the name Leo is reverberating – it’s not M&A, but it’s certainly consolidation.

Sadoun explains: “So, what you are buying is tech and audiences. If I were trying to build something similar today, it could take me 10 or 15 years to get there. When we make acquisitions in the tech space, we buy two things; IPs, and talent, and we make sure that the IPs and the talent are compatible with what we already do. Influential is a great example of that: a fantastic team, with an incredible platform giving our clients access to audiences at scale.”

With a strategy this sharp and a leader this clear-eyed about the future, Publicis Groupe isn't just playing the game — it's appears to be rewriting the rules.

Pay attention to the rise of connected commerce

The way retailers engage and sell to consumers is rapidly evolving, with e-commerce tools bridging the gap between in-store experiences and online shopping, while also delivering competing advertising messages through retail media right at the point of sale.

This shift isn’t just about innovation—it’s also a potential goldmine of revenue for retailers, generating margins between 70 to 90 per cent per advertisement aired on their channels, , according to Boston Consulting. Connected Commerce is a prime example of how personalisation can truly transform the shopping journey.

Kate Howe, executive director of MSQ (the parent company of The Gate), views this development as an exciting opportunity for agency owners to present to clients looking to engage with consumers at every stage of the purchasing funnel. Major retailers are eager to tap into this opportunity if they haven’t already, and agencies are lining up to assist, making those with this expertise highly sought-after assets. “If you want to be, you can be incredibly sophisticated at commerce now,” she says.

Acknowledging the changing landscape, MSQ made a strategic move last November, acquiring United Digital Group, and creating 26DX—already collaborating with brands like Asda Money, Tag Heuer, and Arla, among others.

“Retail media is not an old conversation and it’s becoming so connected and it's the people who can join it up and deliver it to clients in a way that feels seamless and truly add value for them that are going to survive and thrive,” explains Howe. “To do that, you're going to have to onboard new skills quickly. It's hard to scale up fast with this kind of expertise and be credible and that’s one of the reasons that you turn to M&A in these environments – because clients appoint people who can prove that they've done something similar for clients like them already. That's what clients want.”

A People Business

Hulbert adds that VML is always looking to invest in developing talent instead of acquiring bolt-on services, another role AI could play in support, but agencies must keep on top of marketer needs and wants. This is no easy thing. 

The merger of Wunderman Thompson and VMLY&R in 2023 to create VML, the largest creative agency in the world, was one response from WPP to tackle that.

“Clients are starting to be much more future facing,” she explains. "That's because the CMO has to be far more commercial in their role. They are far more targeted on commercial growth and also on commercial savings. That's probably dictated by the economy, so, when businesses have challenges that comes and plays more into the CMO role. They're looking at the future, and that's why we've seen a lot of clients restructure. They're constantly restructuring. It's not just agencies, and I think that trend is set to continue.”

As the dynamics of a people-driven industry evolve, change will becomes essential. As Sadoun points out, the industry will be forced to transition well before 2030 arrives, and this shift could happen much sooner than anticipated.

“The weaker players won’t be able to sustain themselves and stay in the game for the next four-to-five years,” he adds. “And AI and data will have truly changed the market, and even more importantly, client needs and their willingness to in-house certain capabilities will definitely change the kind of products and services they need.”

The Lumascapes of the future ad agency landscape may be about to change significantly, but already there are signs of what to look out for as dramatic changes looms near.

Amidst the flux of AI and evolving client needs that will reshape service offerings, human creativity and strategic vision will remain indispensable. The future agency landscape will be shaped by those who master the intersection of technology, data, and storytelling — with people, ultimately, remaining at the heart of it all.