Conducted by ISBA Partner R3, this Agency Family Tree has been commissioned to look at the overall trends of the UK agency market this year. Their top findings include:
- Holdcos are moving to network enterprise models; this is part the ability to offer E2E services but we also suspect it's commercial as it's easier to offer services within a single contract vs having to negotiate separate agreements with sister agencies. This would mean that clients do need to understand how - if they are with an agency within a holdco model - what services they have not yet tapped into or are aware of.
- M&As in the UK have mainly been what can be described as "credibility" buys. Larger agencies want to add a creative hotshop or a boutique specialist (i.e., influencer, reputation management) to the fold. They are following where clients are spending money, which is much more in Creative than Media (this is reflected in mature markets) due to the contribution to revenue in Creative Effectiveness.
- Following on from the demand for specialist agencies new agencies opening in this market have a more social-culture first bent (i.e. JOAN, Miroma's SillyFace).
- Agency size is stagnant (talent growth has been about 1.4% globally in 2023) and we don't anticipate much movement until there is a better understanding of Gen AI's impact on scope/fees.