The advertising industry has a dirty secret hiding in plain sight: agencies are staffing accounts with more people than ever while producing less effective work. This week’s news cycle revealed the cracks in the façade—from Omnicom’s $13 billion Interpublic acquisition to continued layoffs despite record staff counts. The pattern is unmistakable: agencies are using headcount inflation to mask catastrophic productivity decline.
According to Ad Age’s coverage of the Omnicom-IPG merger, the combined entity will employ over 100,000 people. Yet client satisfaction scores and creative effectiveness metrics continue their multi-year slide. The math doesn’t work unless you accept an uncomfortable reality: more meetings, more tools, more “collaboration” equals less actual productivity.
The Omnicom-Interpublic Merger Exposes Agency Economics
The Omnicom acquisition of Interpublic for $13.25 billion dominated headlines this week, with predictable analysis about scale, buying power, and client conflicts. What nobody’s discussing: why agencies need this scale in the first place.
The official narrative claims it’s about competing with consulting firms and tech platforms. The reality is simpler and more damning: agency margins have collapsed because it takes twice as many people to produce the same deliverables as five years ago. When your creative director needs a project manager, a scrum master, a strategist, a data analyst, and three rounds of stakeholder alignment just to approve a social post, you’ve built a productivity disaster.
The merger will eliminate “redundant roles”—code for admitting that current staffing levels are absurd. But here’s the kicker: the remaining mega-agency will still be overstaffed relative to output, because the structural problems—tool proliferation, meeting culture, approval layers—aren’t going anywhere.
Retail Media’s Staffing Arms Race
Meanwhile, Digiday reported on retail media networks’ continued hiring surge, with companies like Walgreens and Dollar General building out dedicated sales and ad ops teams. Kroger’s retail media division now employs over 400 people. Target’s Roundel has tripled staff in 18 months.
This should terrify brands. Every retail media network is building its own walled garden with proprietary tools, unique reporting dashboards, and dedicated account teams. Translation: brands now need separate staff members just to manage individual retail media relationships. Your Amazon specialist can’t handle Walmart Connect. Your Kroger expert doesn’t understand Target’s system.
The fragmentation is intentional. Retailers learned from Facebook and Google that complexity equals lock-in. By making each platform sufficiently different, they force brands to commit dedicated resources, which creates switching costs independent of performance. It’s brilliant strategy for retailers and an unmitigated disaster for brand efficiency.
CTV Measurement Theater Requires More Bodies
This week brought fresh chaos to CTV measurement. AdExchanger covered the growing dispute between VideoAmp and Nielsen over measurement standards, while streaming platforms continue pushing proprietary attribution models.
The practical impact? Brands now need specialists for each measurement vendor. Your Nielsen expert can’t interpret VideoAmp data. Your iSpot analyst doesn’t understand TVSquared methodology. Every measurement partner requires dedicated personnel to translate their unique metrics into something resembling business intelligence.
This is the staffing bloat playbook perfected: create enough complexity that clients need full-time employees just to decode your reporting. It’s not about better measurement—it’s about making yourself unfireable by becoming sufficiently complicated that replacement costs exceed tolerance for mediocre results.
AI Tools Multiplying Rather Than Replacing Tasks
The week’s AI news perfectly illustrated the productivity paradox. The Drum reported on Google’s new AI-powered ad creation tools, promising to streamline creative production. In practice, these tools don’t replace work—they create new categories of work.
Now your team needs someone to prompt-engineer the AI, someone to QA the AI outputs, someone to optimize based on AI recommendations, and someone to manage the AI tool’s integration with existing workflows. You haven’t eliminated the designer; you’ve added three AI specialists.
Marketing Brew’s coverage of agency AI adoption revealed that shops using AI tools have actually increased staffing levels. The tools require training, oversight, and constant management. They produce first drafts that need extensive revision. They generate options that require human judgment to evaluate. The promised efficiency gains evaporate under the weight of AI’s overhead.
The Project Management Industrial Complex
Beneath all this week’s news runs a common thread: the explosion of project management as a discipline. Agencies aren’t hiring more creatives or strategists—they’re hiring coordinators, managers, and directors of collaboration.
Browse any agency’s LinkedIn and count the titles containing “project,” “program,” or “operations.” These roles didn’t exist at scale a decade ago. Now they’re the fastest-growing segment of agency employment. Why? Because when workflows become sufficiently convoluted, you need dedicated staff just to navigate the complexity you’ve created.
This is pure overhead masquerading as sophistication. Project managers don’t produce client value—they’re the organizational scar tissue that forms around broken processes. Their proliferation signals dysfunction, not maturity.
What This Means for Marketers
If you’re a brand marketer, the implications are stark. Your agency’s growing account team isn’t a sign of commitment—it’s a symptom of their productivity crisis becoming your cost problem. Every new specialist they add is an admission that their systems are too complex for humans to navigate efficiently.
The solution isn’t firing people—it’s confronting the root causes. Tool proliferation needs to stop. Meeting culture needs to die. Approval processes need radical simplification. Until agencies address these structural issues, they’ll keep adding heads to compensate for declining per-person output.
The Omnicom-IPG merger will eliminate some redundancy, but it won’t fix the underlying productivity collapse. Neither will AI tools, measurement standardization, or retail media consolidation. The industry needs to admit that bigger teams producing mediocre work slower isn’t a sustainable business model.
For brands, the playbook is clear: demand smaller teams with tighter scopes. Push back on complexity. Reject proprietary systems that require dedicated specialists. The agency that can deliver quality work with half the people will own the next decade. Unfortunately, this week’s news suggests most agencies are running in the opposite direction.