In an Era of Mega Agencies, Ad Rates Are About to Soar

For most of its history, the assumption in the advertising industry has been that the larger an agency becomes, the more money it has to spend on media, the more leverage it has in negotiations with publishers and networks, the less it will have to pay those outlets for time and space.

This explains the widespread expectation that lower rates will result from Publicis-Omnicom's giant presence in the advertising marketplace. In the short run that surely can happen, but don't expect it to continue over the long term.

When advertising rates result from a two-party negotiation -- media buyer and media supplier, as has typically been the case for decades -- buying power helps to drive down prices. But scale doesn't have the same clout with interactive media.

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via Business Feeds

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