Ad industry consolidation puts independent agencies’ future to the test

The Omnicom-IPG merger may be a global event, but its ripple effects are being felt rapidly in India's advertising and marketing services landscape. The union of two of the world's largest agency holding companies—each with extensive capabilities in media buying, creative, data, performance marketing, and technology—raises a pivotal question for the Indian market: does this signal the start of a new consolidation wave?

Early signs of movement are already apparent. Madison Media, India's largest independent agency, is reportedly exploring merger possibilities, according to multiple industry sources. Insiders indicate that the agency has held preliminary discussions with French advertising giant Havas Media over the past year. Havas is thought to be evaluating the acquisition of the Sam Balsara-led agency as part of a broader strategy to expand its presence in India and achieve the scale needed to compete with the global top three—WPP, Publicis, and the combined Omnicom-IPG entity.

Meanwhile, Mumbai-based White Rivers Media was acquired by the Veefin Group this year, highlighting a growing trend of independent agencies aligning with larger global and domestic platforms to gain capital, technology access, and long-term growth visibility. Gozoop Group also announced plans to merge with YAAP (Yaap Digital). In March 2025, McKinsey acquired ET Medialabs, a leader in customer-centric digital marketing.

"Several small and mid-sized agencies are quietly exploring acquisition paths," industry leaders told em. "Founders who have built 40–50 crore businesses are questioning whether remaining independent makes sense, given that the next phase of investment—particularly in technology and talent—is only going to get more expensive. They are exploring mergers or partnerships with larger agencies," said the founder of a major digital agency. Executives note that the real impact lies not in the merger itself but in the advantages it amplifies—scale, pricing pressure, technology expectations, and client demand for integrated solutions. For independent agencies, particularly mid-sized ones, the landscape is becoming increasingly challenging.

"Whenever global networks consolidate, the ripple effects move quickly in markets like India," says Ashish Bhasin, Founder of The Bhasin Consulting Group and former CEO, Asia Pacific Dentsu, who has led multiple acquisitions.

"The consolidation in the Indian advertising market started over a decade ago. However, a merger of this scale (Omnicom-IPG) intensifies the advantages of size, pricing pressure, technology expectations, and client demand for integrated solutions. For independent, mid-sized agencies, the operating environment will grow increasingly tough," Bhasin explains.

Where independents feel the squeeze

The advertising sector faces inherent challenges. Profit margins are shrinking. Procurement-driven pricing pressure, longer payment cycles, and rising talent costs have further tightened margins for independents. Many founders recognize that staying competitive now demands sustained investment in technology, analytics, and specialized talent—often without the balance sheet strength of global networks.

"Large clients want fewer partners who can do more," said a senior executive at a multinational agency. "That doesn't automatically rule out independents, but the bar is much higher now."

Subhash Kamath, former chairman of ASCI and ex-CEO of BBH India, notes, "Major mergers and acquisitions typically create churn across the ecosystem. Smaller agencies inevitably face pressure as much larger players gain scale, negotiating power, and deeper access to technology and talent."

Meanwhile, brands are increasingly relying on in-house teams to produce digital ads using AI. For instance, Zomato's internal team reportedly generated over 900 unique AI-powered personalized assets for IPL 2024, while RedBus employed generative AI to create 300+ personalized operator videos in eight Indian languages.

The coming period may be challenging as Meta plans full AI and automation adoption by the end of 2026, and Google's Performance Max already optimizes creative and placement simultaneously. As the industry evolves, the Omnicom-IPG merger adds extra pressure on advertising agencies. The combined scale in media buying, data infrastructure, and global client access could tilt the playing field in favor of large networks—especially when multinational advertisers seek to consolidate agency partners.

Consolidation does not necessarily spell doom for independent agencies. Several industry leaders suggest that as networks grow larger and more complex, they risk becoming slower and more bureaucratic, opening space for nimble, specialized players.

"Consolidation creates gaps. Independents can win where speed, cultural insight, and founder-led accountability matter. The market is entering a barbell phase—very large integrated platforms or highly focused specialists," said a senior media buyer, highlighting a trend toward polarization between scale and specialization.

Not the end of independence, say agency heads

As global consolidation reshapes the agency landscape, independent agencies face questions of relevance and resilience. Yet experts argue that scale cuts both ways. Larger networks may become cumbersome and bureaucratic, creating opportunities for agile, specialized independents.

Within this context, the Omnicom-IPG merger represents a strategic crossroads rather than an existential threat. For many independents, the next phase involves choices—whether to scale, sell, or sharpen focus. Independence is not disappearing but being redefined. Shradha Agarwal, Co-founder and CEO of Grapes, frames consolidation as a structural shift that will test—but not eliminate—independent agencies. "Over the next 12–24 months, consolidation will change the playing field, but it won't remove opportunities for independent agencies in India," she said.

While global networks merge for scale, cost efficiency, and buying power, Agarwal notes that size often brings friction. Larger entities become layered, slower, and more removed from senior-level engagement. She argues, "This opens space for independents that operate close to the business. Founder-led agencies that are agile, embedded with clients, and able to integrate creative, media, and commerce will become preferred partners." The next phase, Agarwal adds, will favor agencies with clear positioning and strategic depth—those aligned with client growth, combining speed with accountability.

A pragmatic view comes from Siddharth Devnani, Co-Founder and COO of So Cheers, who sees no direct one-to-one impact on independents. "If a client wants a network agency, they'll pick a network. If they want an independent agency, they'll choose an independent. Ultimately, it depends on team strength, credibility, and work quality," he said.

Devnani notes that hybrid operating models will persist. Network agencies will handle media or mainline mandates, while independents focus on activations, social, influencer marketing, or creator-led work. "That model isn't going away," he said. Consolidation might create limited opportunities when agencies service competing brands, though clients leaving one network are likelier to move to another. "Perhaps around 20% may come to independents."

Skepticism about the broader benefits of mega-mergers is echoed by Nimesh Shah, Head Maven at Windchimes Communications. "I don't see much advantage for Omnicom after global consolidation, except in select areas like media buying," he said, citing stronger bargaining power with publishers and platforms. Shah cautions that consolidation also brings constraints, particularly non-compete clauses, which could force networks to shed clients.

"The learning curve is high and built over years. Clients won't switch just because a larger agency is making a move," Shah said, adding that independents specializing in AI-driven video, online reputation management, and crisis communications remain embedded and resilient.

For Sachin Kumar, Founder of BottleOpeners, the lesson is clear: scale alone no longer differentiates. "Independent agencies that bring deep expertise—across performance, content, commerce, regional marketing, or specific categories—while tying work to measurable business results will stand out," he said.

In a consolidating market, Kumar believes growth will favor agencies that act less like vendors and more like growth partners—owning outcomes, leveraging technology purposefully, and staying culturally aligned with Indian brands.