The birthplace of advertising was, by all accounts, London. According to Adrian Mackay in The Practice Of Advertising, the first acknowledged agency was William Taylor, founded in 1786. Part of the rich history continued on Fleet Street, became White Bull Holmes that went out of business in the late 1980s. One agency that did, however, stand the test of time was “Reynell & Son”, founded in 1812 that is now part of the TMP Worldwide group. Contrary to popular belief and wisdom, the first US-based agency with opened was by Volley B. Palmer in Philadelphia in 1850. The most well-known in the US is J. Walter Thompson which began in 1877.
The agency business has certainly changed since those original agencies opened. Eras of advertising, including the well-heralded “Mad Men” days, serve as a reminder (and sometimes a cautionary tale) of how things have, and continue to change. Full-service has emerged and evolved into boutiques, digital, social, search — just a few of a very long list of designations and specialisations in the agency world.
A quick scan of agencies and holding companies shows a wide disparity in staffing. Traditional large agencies are constantly competing with smaller shops that claim their size allows them to be more agile. In fact, according to the US Census Bureau, two-thirds of advertising agencies in the US employ fewer than five people.
Competition is tough. Consumers, with a massive flow of marketing messages, present an even more intense challenge as agencies work to cut through the clutter to make brands and clients stand out even more. Technology also adds to the mix as mobile and digital advertising budgets are being built and more “traditional” advertising budgets are being cut. In fact, according to the IAB, digital ad revenues were $23.1B in the first half of 2014 however, cable and broadcast TV combined were still going strong with $66B in revenue based on data from Robert Hof in Forbes — and mobile revenue jumped 110% to $7.1B per that same report.
In light of almost perpetual and profound change, what does the future really hold, not just for agencies, but for the agency model in general?
See some of Europe’s most important and prominent agencies and agency leaders share their insights during Advertising Week Europe.