How media overtook the creative function in ad agencies

For much of the last century, ad agencies operated on a 15% media commission—agencies were paid 15% of a client’s media spend as revenue. The creative work was funded from this commission, with an assumed split: 12.5% for creative and 2.5% for media. Under this system, media acted as a logistical support function, while creativity became the main force behind advertising.

In those days, ad executives were generalists, handling everything from strategy to execution. Industry veteran Sylvester da Cunha recalled managing the entire process—taking the brief, writing copy, working with the art director, estimating media, and presenting it all to the client.

The process was holistic, integrating creative excellence with media placement. However, by the late 1990s, media began separating from agencies, fundamentally shifting the balance of power in the industry.

The rise of media agencies

In the mid-90s, media agencies began operating independently, leading to a major industry transformation. I witnessed this firsthand while working at JWT Shanghai when we helped set up one of the first Mindshare offices outside London.

Initially, media agencies charged 3-5% of ad spend, replacing the traditional 15% model. Over time, new fee structures emerged, including fixed fees for both creative and media work, gradually eroding the dominance of full-service agencies.

This shift led to the decline of creative’s influence. Cannes and other industry festivals continued to celebrate creativity, while media evolved into a high-revenue business.

Media agencies profited from bulk buying discounts, even though they didn't fully pass them on to clients, thereby eroding transparency and increasing their profitability. 

The industry saw a change in priorities, with data, programmatic advertising, and automation taking precedence over traditional storytelling and brand-building efforts.

GroupM: The powerhouse of WPP

Though exact figures aren’t public, GroupM, WPP’s media arm, is considered its most valuable asset. Industry speculation suggests GroupM’s margins range from 15-20%, far surpassing creative agencies. In February 2025, former WPP CEO Martin Sorrell even claimed GroupM might be “worth more on its own than WPP”. 

This shift reflects a growing emphasis on data-driven media planning, audience targeting, and analytics-driven campaign optimisation, often sidelining traditional creative approaches.

By 2023, GroupM controlled $62.6 billion in global billings, holding 15% of the market and 29% among the "Big 6" agency groups. Meanwhile, traditional creative has struggled to keep pace with the rise of digital media, which, despite quality concerns, dominates marketing spend.

Today's brands prioritise measurable performance metrics, programmatic media, and influencer collaborations, reducing their reliance on traditional creative teams.

Transparency issues and future acquisitions

The media business, however, faces growing scrutiny. Allegations of price-fixing and lack of transparency led to CCI (Competition Commission of India ) raids in India, shaking client confidence.

While regulatory action remains uncertain, these concerns highlight deeper structural issues in media buying. With brands demanding more accountability, agencies are pressured to disclose their buying practices, rebates, and pricing structures.

As the industry evolves, potential buyers for media giants like GroupM include:

1. Tech giants (Google, Amazon, Meta, Microsoft, and Apple)—They already dominate digital advertising but face regulatory scrutiny. Owning a media agency would give them even deeper control over ad spend, data, and consumer insights.

2. Private equity firms such as KR, Blackstone, and Bain Capital are interested in restructuring for profitability, but their focus is on short-term returns. PE firms could seek to break up media agencies and maximise their value through strategic investments.

3. Agency holding companies (Publicis, Omnicom, IPG, Dentsu) – Looking to consolidate and strengthen AI-driven automation. Consolidation among the major ad networks could lead to a new wave of industry mergers.

4. Ad-tech and consultancies (The Trade Desk, Accenture, Deloitte, Adobe) – Blending technology, data, and creative services. These firms could integrate media buying with consulting and performance marketing to offer full-stack solutions.

5. Sovereign wealth funds (Saudi Arabia’s PIF, Singapore’s Temasek) – Strategic global investments, though media experience is limited. Some governments see media ownership as a way to influence public opinion and global narratives.

Will GroupM be sold?

If GroupM’s value continues to outgrow WPP’s market cap, a sale is possible. A hybrid deal, with a tech firm partnering with private equity, could emerge. Some analysts believe WPP might retain part ownership while selling a controlling stake. Alternatively, GroupM could be spun off into an independent entity, allowing it to operate with greater flexibility.

The future of the industry remains in flux, with media agencies holding the upper hand over creatives.

However, as clients push for more transparency and creative storytelling regains value in a crowded digital world, we could see a resurgence of creative-led agencies. Whether that shift happens remains to be seen, but for now, the battle between media and creativity continues.

(The author, Prabhakar Mundkur, is the Director of Strategy & Business Development at Percept Ltd. A veteran in advertising and marketing, he is a thought leader, writer, and musician who shares insights on brand strategy and culture.)