Is the modern Advertising Agency a sinking ship?

By: Dylan Stewart

The days of Mad Men style advertising agencies with cut-throat deals and major client acquisitions may be nearing to an end, according to experts. For several decades, the advertising agency was a booming industry, with it becoming one of the more successful industries in the modern U.S. All the top corporations looking to market their products or service instinctively would always go to agencies – and why not? At the time, if you wanted the best possible result, agencies were the only option. However, 50 years later, the market has effectively been saturated with agencies, and data is showing that it’s not necessarily a good thing. 

Despite the congestion of the agency market, there exists a bigger threat to the industry. As of today, the biggest threat to private advertising agencies is the fact that they no longer hold a monopoly. As time goes on, we are seeing more major companies begin to create their own in-house agencies, where they can hire a professional staff of creatives to develop ads for them.  A 2018 Forrester/In-House Agency Forum survey found that 64% of respondents use in-house agencies for some services in 2018, which is an increase of 52% from a decade ago; this includes the 70% of marketers who command strategy and campaign direction in-house for programmatic advertising. While at first glance, this statistic seems staggeringly high, the fact of the matter is it is both more efficient in the economic sense and the logistical sense. 

Creating your own in-house agency allows for cheaper up-front costs and easier production between client and consumer. With a typical advertising agency, there will be several back and forth communications. These interactions come with the cost of painstaking meetings, confusing dialogue, and even messages lost in translation. While many of these issues are not specific to the advertising industry, an in-house agency offers a pragmatic solution to these common yet intrusive complications. 

Despite these shortcomings of the agency world, it certainly will not disappear overnight. According to Ad Age, as of 2016 US agencies pulled in over $48 billion, while still employing over 200,000 people. The fact of the matter is, they are still too profitable and too big to give in to in-house agencies and other smaller conglomerates. However, it appears almost inevitable that there will be a sharp decline in the near future, with more and more agencies having to adapt to the new world of advertising. The only question is will they be able to overcome these in-house agencies, or have we seen the end of the Mad Men world of advertising?


Shields, M. (2017, June 18). The future of ad agencies has never been more in doubt. Retrieved from

Dan, A. (2018, November 13). The State Of Advertising Has Never Been Worse. Retrieved from

Thompson, D. (2018, April 4). Where Did All the Advertising Jobs Go? Retrieved from

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