May
12
Consolidation and the capability crisis
What the holding company model did to marketing capability
Something happened to marketing capability over the last three decades and the industry has been reluctant to say it plainly.
It wasn’t a skills shortage in the conventional sense. The talent was there. Brilliant people kept entering the profession, and many of them were genuinely exceptional. What changed was the structural environment in which that talent was supposed to develop. And what that environment systematically produced – not through malice but through logic – was a profession that became increasingly unable to recognise its own value, articulate its own contribution, or develop the next generation with any real intention.
If you have spent time inside a large agency network or trained into the profession over the last fifteen years, you will probably recognise this from the inside. The question worth asking now is why it happened, what it has left us with, and what it means for the people trying to build genuine capability today.
How the model worked, and what it optimised for
The consolidation of the agency industry from the 1980s onwards was not simple opportunism. The pressures that drove it were real. Global brands needed coordinated communications across fifty markets simultaneously. Digital transformed client expectations almost overnight, making the old model of creative intuition and media relationships look opaque and unaccountable. Clients needed performance data, attribution, measurable outcomes. The fragmented boutique landscape that had served the previous era genuinely couldn’t provide those things at scale.
The holding company model read those needs earlier and more accurately than almost anyone. That was real strategic intelligence.
But the model it built in response was not optimised for marketing capability. It was optimised for financial performance. And those two things, while they can coexist, are in tension in ways the industry never properly acknowledged.
The growth logic was simple: acquire the independent, absorb the specialist, consolidate the roster, strip the cost base, report the synergies, repeat. Agencies founded on distinct creative cultures and specific ways of seeing the world were acquired, merged and gradually drained of the thing that had made them worth acquiring. The creative-first agency became structurally inconvenient – too opinionated for cross-selling, too dependent on specific talent that couldn’t be replicated at procurement pricing. What replaced it was the managed services model. Scalable, predictable, acceptable to procurement. And largely indistinguishable from every other managed services model on the pitch list.
The industry called this professionalisation. A more accurate word is deflation.
The economics that nobody wanted to name
The training argument has appeared in conference speeches and IPA reports with admirable regularity for years. It surfaces. It generates agreement. And then, reliably, it is subordinated to the quarterly number.
This happens not because the people making the speeches are insincere. It happens because the economic structure of the industry makes underinvestment in training the rational choice for every individual firm, every time.
The logic is precise. Genuine craft development – building creative judgment, strategic capability, the professional confidence that comes from being actually developed rather than merely deployed – produces skills that are transferable. The moment a trained practitioner moves, the investment migrates with them to a competitor who paid nothing for it. So the dominant strategy for every network individually is to free-ride: wait for someone else to do the training and then recruit the output.
The result is systematic industry-wide underinvestment. Collectively destructive. Individually rational. And entirely predictable given an incentive structure nobody in a position of authority has been willing to change.
There is also a darker logic running underneath the economics. Undertrained practitioners are cheaper. They are less able to articulate their own value. They are less likely to leave for independent practice because they lack the confidence that genuine craft development produces. The conditions that serve the financial model happen to produce practitioners who are easier to retain at lower cost.
This is not conspiracy. It is simply what happens when talent is managed as a cost variable rather than a strategic asset.
Where the talent went
The talent didn’t disappear. It deflated outward. Into the creator economy, into technology companies, into in-house teams, into independent practices built around craft and autonomy rather than network hierarchy and pitch cycles. For many of the individuals involved, this was liberation – more freedom, more ownership, more direct connection between effort and meaning.
But consider what the industry lost collectively. The institutional knowledge. The mentorship structures. The conditions under which the next generation of genuinely exceptional marketing thinkers might have been shaped. That pipeline didn’t simply redirect. In many places, it was broken.
The young people entering the profession now are inheriting an industry that no longer has a clear story about why it is worth joining or what kind of career it can genuinely offer. That is not a small problem. It is the primary capability problem, and it is structural rather than individual.
Why AI makes this urgent rather than historical
It would be convenient to frame this as a story about the past – something that happened during a particular period of industry consolidation and has now resolved itself as the model evolved.
It hasn’t resolved. AI is compounding it at speed.
Entry-level roles that once served as the first stage of craft development are being automated or contracted out. The apprenticeship ladder is losing its lower rungs precisely at the moment when the pipeline feeding it was already depleted by decades of underinvestment.
The specific capability crisis this creates is not a shortage of people who can operate tools. It is a shortage of people who have developed the judgment to know what the tools should be doing, and why. That judgment cannot be downloaded. It is built through practice, feedback, mentorship and the accumulated experience of doing difficult creative and strategic work under people who know what great looks like.
Here is the sharper version of the same point. When every organisation can generate persuasion cheaply and at volume, the question of whether anything genuine sits underneath the narrative becomes existential rather than strategic. Authenticity – the honest alignment of story with reality – becomes scarcer and therefore more valuable precisely because AI makes its simulation so easy and so cheap.
The organisations that will have the advantage are not the ones with the most sophisticated tools. They are the ones that have invested in the human judgment that knows how to use them. That investment has to start now, and it has to be deliberate, because the structural conditions working against it have not changed.
What this means in practice
Capability development that genuinely works is not a training day. It is not a platform certification or an AI tool familiarisation workshop. It is the slower, harder work of building judgment through practice, challenge and sustained development over time.
That requires organisations willing to treat capability as a strategic investment rather than a discretionary cost. It requires senior practitioners willing to invest time in developing the people around them, not just delivering through them. And it requires a clearer industry-level conversation about who is responsible for building the talent pipeline that everyone claims to need.
The free-rider problem doesn’t solve itself. But it does respond to organisations and individuals who decide to play a different game – investing in genuine craft development because they have understood what the alternative produces, and what they stand to lose by perpetuating it.
The capability crisis is real. It is structural. It is not inevitable.
But it will not improve through more performative noise about it.
Jam Partnership works with organisations to build genuine marketing capability – the kind that holds up under pressure, justifies investment, and compounds over time. If you’re thinking about what that looks like in your organisation, [get in touch.]
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