Rinse and repeat? Part II: How Publicis is stealing the show and how it feels to compete
Opinion
In this second part, Nick Manning analyses the rapid transformation of the supply-side sector in more depth, explaining what is happening, why, and what may come next.
A UK advertiser with a very healthy budget recently tried to add a Publicis agency to its pitch list, with no success. It was too busy assimilating new clients, often won internationally.
It is clearer than ever who the winners will be in the new advertising world as the tectonic plates shift, and also how and why they will win.
The competition between agencies used to be about ‘talent and tech’, but now it’s about having the best and broadest toolkit that can be automated, especially across multiple brands and markets.
We’re not there yet, and in the meantime, the legacy agency groups have to compete with each other but also with platforms that make content and its distribution look easy.
This makes competition ever fiercer as different system providers compete for marketing money; the infantry is finding life even harder in the trenches, especially when there are fewer of them.
Public verbatims from some of the people living through it offer an interesting perspective, as we’ll see below. But first, a recap from Part One: it seems likely that the Holding Companies’ goal of transforming into Operating Companies with platform businesses will lead advertisers to take more of their needs in-house.
This includes co-ordinated marketing and fulfilment channel strategy, content creation, measurement and analytics, with some production and activation. These will supplement channels already managed in-house, such as search and social.
Data supports the likelihood of this happening, although every company will have its own recipe, unlike the common agency-led structures of prior times.
A wider variety of external providers will continue to play a role as an extension of the client’s marketing capability, but in a very different guise from the agencies of yore.
In this second part, I analyse the rapid transformation of the supply-side sector in more depth to explain what is happening, why, and what may come next.
Following Part One, there were some interesting reactions to the prediction that advertisers would take more control, with some pointing at PepsiCo/Publicis as evidence of the rude health of the agency sector.
Except, of course, that Publicis is no longer an agency group.
It is an aggregator business that connects content, data, identity, commerce and media, with added spoonfuls of AI for flavour; the individual agencies matter less in a unified structure, and they have evolved their business model to make it more streamlined.
We haven’t got the vocabulary for this yet.
The PepsiCo news set tongues wagging because of the Coca-Cola hokey cokey and the lack of a pitch, but this wasn’t the first time.
The revolution began in 2015 with the original Publicis ‘Power of One’ strategy, the streamlining of internal structures, brands and P&Ls and with the incipient M&A stream through the Sapient acquisition.
Since then, the additions of Epsilon, Lotame, Profitero, Practia, CitrusAd, and Mars United Commerce, among others, have filled the capability jigsaw in ways no one else has matched.
No doubt integrating these assets and applying them locally has tested even the most hardened minds, but it tells and sells well.
The success of its strategy was evident long before PepsiCo, with the big wins of Sky and L’Oréal in the UK in 2024 and the Mars global business in 2025. The latter combined media, commerce, production and Influencer. It wasn’t a media pitch but something very different.
Beyond PepsiCo, Publicis has this year hoovered up Microsoft from Dentsu and big chunks of LVMH without pitching, resetting how the big groups win business.
The Publicis/Microsoft deal is an enterprise partnership, and the full template is set at a much higher level than a client/agency relationship. The PepsiCo relationship will be embedded in business processes.
Such deals are negotiated at the most senior levels and involve multiple stakeholders, not just the usual marketing and procurement personnel.
This trend changes the role of marketing procurement: less side-by-side benchmarking, far less focus on media cost, and a more enterprise-wide role that considers the full package of resources, matching internal capabilities with external provision. Knitting these parts together will test procurement.
This will have a major effect on the pitch management community, specialist lawyers and auditors, and independent media consultancies, shifting their role toward organisational and operational support with higher technological and analytical capability. Independent auditing of data and its use will eventually replace cost benchmarking.
Playing catch-up
While Publicis has raced ahead, the other groups have been playing catch-up, Top Trumps and Tetris simultaneously.
IPG broke early by buying Acxiom in 2018, but failed to streamline its assets, so Acxiom is now being stitched together with Omni in the expanded Omnicom.
Dentsu bought Merkle in 2016 but not the rest of the stack it needed, and probably didn’t integrate it as required.
WPP’s strategy has been different, as analysed below.
It’s a race against time, and the Holding Companies are having to sprint to transform themselves into platform-led Operating Companies, competing against each other but also against Google (especially YouTube), Meta, Amazon, TikTok, the bigger Retail Media Networks, the streamers and even the new breed of content providers, including Influencers and Creators. It’s a bunfight.
The transition involves a wholesale reorganisation of agencies (so, thousands of people), P&Ls, real estate and those all-important data and technology assets; it’s hard, time-consuming and expensive work, especially with high severance costs.
The Silicon Valley platforms don’t have to endure this pain and can peel off new AI-led advertising products.
Google’s suite of tools enables comprehensive DIY provision, while the other platforms are all building self-serve tools that any advertiser or agency can use to create, produce and distribute content. The streamers are aiming to make TV easy to buy.
Meta has made no secret of its ambitions.
The Holding Companies have to become OpCos while growing revenues and maintaining operating profit margins to keep the shareholders happy and executive salaries high.
The difficulties of maintaining profitability and the impression of progress to reassure clients and investors are a minefield, which brings us on to WPP.
Its M&A activity in new technology has been much more modest, with Infosum a snip at £108m, but it’s dwarfed by its competitors’ spend and jigsaw-filling strategy.
WPP has taken a more organic route, working with Google to build WPP Open with self-reported spend of $400m over five years, but this doesn’t deliver the full-stack capabilities of Publicis.
WPP has also had the hardest task, with 30 years of sprawling, disconnected acquisitions and an over-reliance on media and especially non-client revenue.
Lawsuits and court papers
The difficulties of transforming such a vast and disparate organisation are illustrated in gory detail in a current class action lawsuit in the United States, where an investment group alleges that WPP deceived it by misrepresenting its situation from March 2024 to late October 2025.
Specifically, it claims that WPP dramatically overstated the success of the reorganisation of GroupM/WPP Media. It was a disconnected organisation of duplicative independent fiefdoms, each with its own structures, systems, and back office, and WPP claimed it had been radically reformed during that period.
Perhaps more damaging in the lawsuit is the revelation that WPP’s data and technology offering was sub-standard and uncompetitive, especially compared with Publicis.
Public records show that WPP developed its tech offering from internal assets such as mPlatform and an external system called AmeriLINK, spliced together to form Choreograph, its global data and identity offering.
So far, so good, but this revolved around identity and the aggregation of data, while others were investing in first-party data with privacy restrictions, ‘clean rooms’ and AI models that don’t rely on persistent IDs, not to mention Retail Media and, in Publicis’ case, the acquisitions of Influential, BR Media and Captive8 in Influencer marketing.
When WPP claimed in October 2024 that its Media Studio provides access to Choreograph’s global data graph of five billion people, agency hyperbole jumped the shark, but the message didn’t mean much to advertisers compared to others’ capabilities (who didn’t have to claim to reach over 60% of the world’s population).
The class action court papers allege that WPP lost significant business during this time because it failed to restructure its media business and couldn’t offer competitive tools.
The 96 pages of court papers spell out what was happening through verbatim accounts from 13 ex-WPP employees, lightly anonymised but still easily identifiable. They describe in vivid detail what life at GroupM/WPP Media was like at the time.
Media had long been WPP’s trump card, leveraging group volumes to gain client advantage and generate revenue. This model was bone-deep.
However, as WPP’s fortunes waned amid changing client needs and competitive pressure, the solution, as depicted in the court papers, was to restructure through cuts.
One quote sums the situation up graphically: a former GroupM CFO says WPP “was milking the cash cow and it was trying to cut pieces of meat at the same time”.
A Transformation Project Management Officer joined in January 2024 but soon realised the necessary simplification was “not going to happen” and that by March it was effectively abandoned.
The CFO quoted above declared that cost-cutting without proper automation or AI caused tremendous “internal damage” and was falsely portrayed as restructuring.
Client assignments were under-staffed, with more than one ex-employee stating that “loads of staff vanished, and the work still needed to be completed”, and so the remaining people struggled to cope.
During this period, Publicis in particular was successful in winning major accounts through its more streamlined operating structures and superior tools.
The court papers state baldly: “multiple former employees explained that deficiencies in data analytics, AI tools and technology platforms made it difficult for WPP to compete, directly contributing to the loss of numerous clients”.
One employee reports that some clients were won on the basis of promises its data capabilities could not keep.
The court papers also allege that the early versions of the new WPP Open platform produced highly defective results.
Perhaps even more damaging is the contention from one ex-employee that Choreograph’s weakness forced GroupM/WPP Media to bid more aggressively on price: it “completely dropped its trousers” and offered sweetheart deals.
On this subject, the court papers also allege that “WPP’s rebate-driven trading practices and opaque cost structures materially damaged client relationships and caused severe client attrition”.
This is backed up by statements from former employees in the court papers that “these structures were designed to enhance the agency’s margins and generate undisclosed revenue streams, rather than maximising value for clients”.
Foster vs WPP
The lawsuit also cross-references the Foster vs WPP complaint, where I act as an expert witness for the Foster legal team, and alleges that WPP did not disclose the extent of its reliance on obscure media trading revenues, such as ‘principal’ buying.
As widely reported, after the ANA transparency study of 2016, rebates were relabelled as ‘Purchase Risk’ within WPP, as if the media inventory were somehow being bought by GroupM on its own account, and client spend was repackaged as ‘proprietary’ and sold at a disguised margin.
The negotiated media trading benefits were enabled by the volume contributed by clients who did not ‘opt in’ and therefore could not receive any advantage, real or not, but even those clients who signed up declined to participate.
One of the less poetic quotes from the court papers comes from a former staffer who described rebranding such practices as “rolling the same turd in a different pot of glitter”, and WPP’s largest clients seem to have noticed.
According to one of the anonymous ex-employees of GroupM, they were able to practice “triple dipping”, a combination of fees, arbitrage and bonuses, that generated margins of up to “74%”, a strangely precise number.
However, these “created both compliance and ethical risks”, leading to client losses.
The reality is that WPP did not need to get its clients to opt in as it could make more money if they didn’t (as covered in Part One). It is also possible that the push for more revenue from non-transparent sources was necessary to offset profit attrition throughout WPP, perhaps with few questions asked.
This situation reached its height in China with the life-sentence conviction of GroupM’s lead investment operative and the Sony case reported in the Foster vs WPP court papers, now provisionally sealed.
It is arguable that the egregious use of ‘principal’ and ‘proprietary’ media during this period rescued WPP and prevented an even worse outcome.
While the most senior leaders within WPP were trumpeting the restructuring and tech capabilities to analysts and shareholders, the rank and file agency people had to do the same in front of their clients-a thankless task, including fronting up the ‘proprietary’ story that fell flat with clients.
The plaintiffs in the class action lawsuit claim that official statements obscured the failed reorganisation of GroupM, the lack of competitiveness of its tech, and the doubling down on ‘proprietary’ media.
The decline in WPP’s financial performance led to Mark Read’s departure, and the new CEO, Cindy Rose, said GroupM/WPP Media had “lost its way”.
Given WPP’s legacy reliance on media, this can be interpreted as WPP having lost its bearings. Hopefully, WPP is regaining its mojo, even if the Elevate 28’ strategy is built on shaky foundations.
It doesn’t inspire confidence, however, to read that WPP is aiming to subvert the production tendering process in its favour, further jeopardising client trust.
It is also clear that the pivot of the Holding Companies to OpCos described in Part One will take much more time and effort. Meanwhile, they have to present a picture to clients and investors that the necessary restructuring, integration of tech investments, and ability to sell clients on bundled ‘proprietary’ solutions are going according to plan.
This could be ‘rinse and repeat’ Mark 2.
It would not be surprising if advertisers were meanwhile cautious about the eventual results of this transition and considered de-risking their exposure by taking more control of their advertising processes, probably for good.
A new order is emerging, with more client control at a higher enterprise level
This is very different to the old conversations about ‘in-housing’ media, and especially media buying.
Publicis has shown it can offer a broad range of services and tools across many activities and make them relevant across client companies. The extent to which this is true remains unknown, but the other groups are all following suit with automated, arbitrage-led solutions.
What is absent, however, are references to consumers, markets, brands, strategy, creativity and the need to nurture channels that provide the scale and profile of audiences that grow businesses. Nor is there much talk about people in the ‘agentic’ age.
It’s not surprising because advertisers want to book the savings from AI, but the baby may be thoroughly thrown out with the bath water.
Advertisers will likely take over some of the functions agencies used to perform, and a new breed of agency will emerge with a combination of assets that can deliver business growth in a simpler way that doesn’t rely on the vagaries of platforms.
Plenty of people will aim to do this; after all, not everyone can be a consultant, but it takes bravery to back yourself in a time of huge uncertainty.
It won’t all be ‘rinse and repeat’ because people are bold, imaginative, and resourceful; and we’ll see much more of that as machines get programmed to take over.
Nick Manning is the co-founder of Manning Gottlieb Media (now MG OMD) and was chief strategy officer at Ebiquity for over a decade. He now owns a mentoring business, Encyclomedia, which offers strategic advice to companies in the media and advertising industries, and is the non-executive chair of Media Marketing Compliance.