Why holding companies are losing their grip on brands

Fast Company

08-07-2025

Ever notice that companies making the most money rarely talk about just money?
Perennially successful companies are led by management obsessed with customer experience, product performance, talent, and culture. They focus on better, and healthy margins occur naturally from creating something so great that customers are willing to pay more.
Even investment bankers talk about the client's business before they start counting the cash.
A sure symptom of a company in trouble is when management meetings are consumed by margins, debates over timing for the next round of layoffs, or consensus on cutting back on bagels in the breakroom.
When an outbreak of financial fever infects the biggest players in the category, it's only a matter of time before everyone feels queasy.
This type of earnings epidemic is rampant across the marketing world, especially at the big advertising networks known for making brands famous. Old models are dying, legacy companies are being disrupted, and clients are desperately searching for something new.
Most iconic advertising agencies founded during the Mad Men era sold their Madison Avenue marquees to holding companies years ago. In the short term, that seemed like a good idea, as holding companies offered more choice to potential clients—and Wall Street always rewards size—but in the long run, it hasn't worked out so well, either for agencies or their clients.
Salaries have been flat or declining for almost a decade, margins are tighter than ever, and agency models are breaking faster than plates at a Greek wedding.
Clients are reevaluating where they spend time and money. Navigating an ever-changing media landscape requires an adaptable model rarely found at monolithic agency networks. Too many platforms, not enough content, and no silver bullets left in clients' media arsenals, which once only consisted of TV, radio, and print.
Holding companies are collapsing under their own weight, having bought too many redundant agencies during the boom years, only to find themselves with limited cash flow and no clear path toward reinventing themselves. Clients are finding big agency partners distracted or conflicted—unreliable navigators at a critical juncture.
WHERE THE AGENCY MODEL WENT WRONG
This malaise is a consequence of a flawed business model that's taken almost two decades to fail. The full catalogue of sins is too long to list here but includes splitting the media business from creative and production, charging for hours instead of services provided, cutting senior talent to make margins, and ultimately selling process over people.
Marketing isn't a process; it's a meeting of minds, a collision of creativity, collaboration, and craft.
Once you commoditize a category, it becomes a race to the bottom or a battle for scale, but now that a market reckoning has arrived, discerning clients are realizing that size isn't always an advantage.
Creative agencies should be valued for the size of their ideas, not the size of their organization.
Technology has levelled the playing field, so a chance for clients to work with experienced talent in close collaboration seems a better bet than paying for an army of eager but inexperienced foot soldiers at a global network.
A BETTER WAY FORWARD FOR CLIENTS AND CREATIVES
That's why there have been so many launches of smaller, independent agencies, as well as the arrival of VC firms onto the scene, investors looking to buy just the right pieces— no more and no less —required to build integrated campaigns for clients. Disruption means a chance to build something better, a model less familiar but more suited to solving modern marketing challenges.
These emerging models are reshaping client expectations by offering expertise in often-neglected but critical moments of the customer journey. A renewed focus on in-store displays, product design, and activations are driving retail. Audience-obsessed media partners are helping clients choreograph their campaigns to ensure each ad isn't just a disposable one-off moment. Savvy strategists are reinventing brands from the inside-out by mining the DNA of what made that company special in the first place.
That sort of introspection on what makes a company special is ironically what the agency business lacks right now, a reminder of the soul of the business—creative solutions to business challenges. Art as commerce. Media that matters, and content that people actually want in their feed.
Agencies are in the business of helping clients grow their business. Holding companies are in the business of making money. Two entirely different goals which naturally lead to contradictory decisions.
The consequence of almost two decades of compulsively buying agencies is that holding companies have run out of new sources of revenue, so two of the biggest players are now acquiring each other. Like two neutron stars colliding to create a black hole, it's unclear if anything good will escape this merger other than senior talent who don't fit below the bottom line.
This is the proverbial last straw, the juniorization of an industry. Experienced talent is dismissed when too expensive, and junior talent becomes so distracted by rolling layoffs that they can't focus on the work.
Clients responsible for big brands are unlikely to wait around for the dust to settle. They want a partner focused on their business, not one squinting at spreadsheets.
Dinosaurs had their day but didn't evolve as the landscape changed, and that's okay, because as they decomposed, they ultimately became the fuel that powers our modern world. Even now, the diaspora of talent from decaying networks is reenergizing the marketing industry, and it's only just begun.
FINAL THOUGHTS
There's never been a more exciting time to work in marketing. Clients are eagerly searching for 'other' models—alternative approaches that brings top talent together. New ways of working, more investment in innovation, and a welcome return to people over process.
If you take care of the people doing the work, usually the work takes care of itself. That's an easy investment that even the folks counting the money should want to make.