The Death of the Holding Company
Published in Nov-Dec 2022
Forgive the sensationally morbid headline, but now that you are here, it might be worth your time to consider why the behemoth holding companies of yore that ruled the roost up until now may have gone way past their best-by date.
This should not surprise us. In the age of goliath networks, concentrated creative and media services in the analogue universe successfully helped clients looking for a scope, scale and a single window to the outside world. But in the age of the digital multiverse, commerce is increasingly built through creativity, collaboration and connectivity. And considering that everyone is their own publisher and broadcaster in the sharing economy, there has never been a better time to celebrate co-creation, independence and individuality – for the benefit of the clients we serve.
In this context, holding companies are struggling to reinvent themselves. They are facing their own ‘Kodak Moment’, so to speak. It is not their fault. Apart from a very limited number of large, global advertisers who see holding companies as providers of global capabilities and scale, most clients today are looking for collaborative, agile teams that are swift and responsive to their needs in a tech-enabled, digitallycentric and remote-controlled world. Asking holding companies to deliver this mix of speed and specialist capabilities is asking them to dismantle the bureaucratic and often rigid hierarchies that define them. In any such organisation, the culture places emphasis on internal competition over generous collaboration.
Moreover, holding companies housing the integrated agency model are often shiny on the outside, but leave a lot to be desired on the inside. The only people who will deny this are the ones running these bureaucracies. Just ask the executive vice assistant to the intern who answered your last phone call. While you are at it, a better question to ask is whether these holding companies have the instinct and appetite to direct the thrust of their ambitions (read: money) to create the kind of ecosystem that is relevant and resonates with today’s markets. Can they shed the deadwood and fill their ranks with a tighter, nimbler and smarter group of changemakers who came into the creative space looking to do just that in the first place?
To be fair, every organisation conforms to its purpose. Yet, they must continually adapt with time to avoid risking petrification. If holding companies are to increase their relevance, they must do something so immensely valued in our industry and in ways that will ultimately mute their critics. That ‘something’ is fostering creative talent. If holding companies become a pantheon of the creative arts that can attract, groom and retain the world’s most sterling creative talent (instead of seeing them open their own shops), their extraordinary output – not to mention, inspiration for the industry – will keep them relevant and invaluable for the next generation of creative flag-bearers. This is foreseeable because they have the muscle to flex change.
But it might never happen. A brutal untangling of agency services is underway. Agencies used to be citadels of ideas, cultivating insanity in bite-sized pieces for brave clients. But they are falling prey to digital fodder; one-man hacks who produce social tiles that are grouted with mediocrity. Moreover, in-house teams have brought standards even lower for fear of unrealistic deadlines designed for speedto-market under the glare of unimaginative supervisors. Add to this, the search for cheaper suppliers and vendors who are assigned to different parts of the process, making the process itself – and its results – a patchwork of signed-off compromises. And let us not even talk about getting hammered by tech giants, consultancies and the chairman’s wife.
Maybe the role of the holding company is no longer to ‘hold’ the network together but to unleash its potential far and wide. Permitting its agents to mix and migrate, cross-pollinate and cultivate new avenues of creative discovery. The kind of stuff that leads to real growth for clients. Holding companies are great at scaling and building shareholder value. But they are not great at putting creativity before efficiency. For that to happen, they need to move away from the soft, edible centre of their world, to the sharp edges of innovation and creativity. That happens among the outliers, among the independents. Unless the holding companies evolve into a network that is owned by the agencies (and not the other way around), they may likely have finally limped into their deadline.
Faraz Maqsood Hamidi is CE & CD, The D’Hamidi Partnership
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