Buying an Agency Without Destroying Its Value

Introduction updated 29 October 2026

The acquisition of an advertising agency often presents itself as a clean transaction, a matter of numbers that align and markets that expand. On paper the logic is sound: new clients, sharper capabilities, the quiet arithmetic of shared costs. Yet time and again the promise dissolves. The thing acquired is not the thing that was valued and those of us who are left to 'make it work' inside the new organisation find the days, weeks and years that follow strangely hollow and the weekly standing and ad-hoc meetings of 'fixing' ultimately exhausting.

I have spent much of my working life within the large organisations that buy and sell these agencies, that consolidate and divest capabilities, that mash and then throw away logos in email signatures and the questions have never left me. Why does the bringing together of two complementary houses so often destroy the very qualities that made each of them worth the price? What, precisely, is being purchased when the contracts are signed and the names change on the doors?

An agency is, at first glance, a simple creature. It gathers people of particular gifts, sets them to the problems of clients and takes payment for the work. But its true substance is not found in any single talent or list of capabilities. It lives in the invisible web of trust between them, in the long habits by which work is done, in the quiet knowledge of how a particular client’s organisation truly moves. These things are hard to measure and easier still to break.

This was the ground of the research I undertook for my Executive MBA at Imperial College Business School, finished in the autumn of 2025. I set out to understand how private equity and strategic buyers (agency networks and consultancies for example) might take possession of such businesses without destroying the living tissue that made them valuable. The conclusion was plain enough: financial performance must be understood, but it is never enough. One must also grasp the system of people, relationships, incentives and daily practices that produce those numbers and what becomes of that system when ownership shifts.

Four questions emerged, each bound to the others.

What are we really buying?

Revenue, earnings, margins, growth rates, the roster of clients; these are the familiar measures. They tell us much, yet they leave the essential magic of a creatively-orientated business untouched. Consider a relationship that has lasted years. Its strength may rest upon a single creative director who understands the client’s unspoken fears, an account lead who holds influence in the corridors of client and agency offices and a delivery team that has learned, through long repetition, how to move as one. Change one piece and the relationship may endure. Alter several at once and the outcome becomes a matter of chance.

We might attach the same uncertainty to digital work. A substantial share of revenue may be labelled digital, yet this says little about whether anything durable has been built. Is there proprietary technology? Does the work renew itself year after year? Are the capabilities woven into the client’s own operations, or can they be replaced by any competent outsider? An acquisition transfers the legal shell but it does not automatically transfer the conditions that allowed the shell to thrive. Financial diligence must therefore be joined by a colder, more patient examination of the people and the relationships that generate the figures.

What happens when we change the system?

Particularly revealing are the cases in which an agency is cut free from a larger parent (or 'carve outs' in M&A terminology). A good and successful example of this is the sale of Kantar, at that time WPP's research arm, to Bain Capital, a private equity firm. On the surface the business appears self-contained with its own clients, its own accounts, its own leadership, even its own name. In reality it drew upon shared talent, borrowed technology, informal networks of advice and the simple reputation of the house from which it came. These are soft interdependencies, difficult to map because they are rarely written down. A person knows whom to call to solve problems when they inevitably arise. Expertise is borrowed across teams. Relationships have grown over years and never found their way into an operating manual.

When ownership changes, some of these threads are cut; others are expected to continue under altered loyalties and altered pressures. The question then becomes unavoidable: how much of the value assigned to the acquired business was in fact sustained by the larger organism from which it has been removed? It is possible to buy the legal entity, the contracts and the employees and still fail to acquire the conditions that once made success possible. The design of any carve-out or integration must therefore reach beyond finance, law and systems. The buyer must learn which relationships and capabilities must be kept alive, which can be replaced and what it will cost to rebuild those that cannot.

On paper, such transformations are easy to assume. In practice, change is agony. A topic on which I intend to explore through future writing.

Does integration create value, or merely rearrange the furniture?

The familiar logic of consolidation is to join complementary strengths, eliminate duplication, share clients and produce a whole greater than its parts. Shared ownership, however, does not by itself produce cooperation. Teams continue to guard their own revenues because incentives discourage the open hand or the open mind. Cultures and working habits prove stubborn. And the pressure to deliver the savings written into the acquisition model can drive change before anyone has understood what is being altered. An ongoing consolidation of the agencies folded within the VML banner provides this author with first-hand experience of the obstacles leaders and their organisations must overcome in order to realise such ambition.

There is a tension at the heart of the matter. The buyer must often reshape the business in order to justify the purchase price; yet those very changes may hollow out the capabilities for which the price was paid. This is not an argument against integration. Some practices are wasteful; some relationships rest too heavily on single individuals; some parts of an organisation stand to gain from being brought into closer company. The difficulty lies in distinguishing what creates value from what merely adds cost.

Sequence matters. Protecting critical talent and the trust of clients may need to precede the standardisation of processes and the pursuit of efficiencies. Drawing teams into genuine collaboration requires new incentives and new habits of management rather than the simple imposition of shared systems charted on slides. I write with a heavy, familiar ache in the shoulders knowing that transformation is an ongoing process, requiring daily pumping of energy into a complex dynamic system, navigating its emergent phenomena and externalities that could never be planned for. After all, few of us find the discomfort of change enjoyable even if we believe and want in it. And of course, the most useful test remains the simplest: does the integration improve what the client receives, or does it merely satisfy the arithmetic of the deal model?

Is this the right buyer for this business?

One more area the research looked into is in what this author has quite literally in this very moment coins 'Buyer-Strategy-Fit'. Private equity and strategic acquirers may see the same opportunity in an agency, yet their capacity to realise it differs. A large network or consultancy may open doors to clients, technology and capabilities otherwise beyond reach and the same organisation may also impose layers of management, standardisation and complexity that slow the acquired business and dull its edge. Private equity may bring clearer financial discipline and sharper incentives, yet the investment horizon and the required returns can dictate both the nature of change and the speed at which it must appear.

Neither form of ownership is inherently superior. What matters is the fit between the business being acquired, the strategy for creating value and the capabilities and constraints of the buyer. An acquisition that demands long cultural and organisational change sits poorly with an owner who must deliver rapid operational results and return to the investors ('Limited Partners') before the end of a typical five-year lifecycle of a fund. Conversely, a business whose inefficiencies are clear may suit a buyer experienced in addressing them and properly motivated to do so. Buyer–strategy-fit belongs in the investment decision itself, not as an afterthought once the papers are signed.

A framework for asking better questions

These considerations led to the Framework for Creative Industries, which gathers four areas of assessment:

1. Industry dynamics — the technological, competitive and structural forces that shape the target’s prospects.
2. Value-creation opportunities — the credible paths for growth or improved performance that rest upon the business’s capabilities, relationships and market position.
3. Integration risk — the cultural, operational and informal dependencies that may be disrupted and the consequences for value.
4. Investment horizon and buyer–strategy-fit — whether the buyer possesses the capabilities, incentives and time required to deliver the intended strategy.

The framework does not offer a formula for success, nor does the research claim predictive power over returns. It is a means of looking more closely, of testing the assumptions that underlie an acquisition and of locating the points at which value may be created or quietly destroyed.

About the research and what comes next

The project draws on semi-structured interviews conducted between May and September 2025, alongside transaction documents, industry reports and academic literature.

It is exploratory research, and there are limitations worth acknowledging:

The interview sample is small, perspectives differ depending on the roles and experiences of participants and consistent quantitative evidence on outcomes such as client retention, employee departures and post-acquisition performance is difficult to obtain.

The findings therefore identify plausible mechanisms through which acquisitions create or destroy value. They do not establish how frequently these mechanisms occur, their relative importance or whether one form of ownership consistently produces better outcomes than another.

I would like to take the research further.

In particular, I am interested in whether the framework can be tested against a larger set of transactions, with comparable measures of financial performance, client retention, talent stability and integration outcomes. It would also be useful to understand more about the circumstances in which integration succeeds, and whether some of the relationships identified in the research are more important than others.

There is also a broader question that I think deserves further examination, particularly as generative AI begins to change the economics of advertising and marketing services.

If the value of an agency increasingly depends on its ability to combine human judgement, client knowledge, technology and organisational capabilities, how should we think about what is being bought, what can be replicated and what is worth preserving?

I don't think the answer is straightforward and the research does not pretend otherwise.

If you are working in this field, have experience of acquisitions or integrations, or would simply be interested in helping to develop the research, I would welcome the opportunity to compare notes. I would also be happy to offer help in return where I can.

You can connect with me on LinkedIn or email me.

Note: This overview covers research completed in 2025. The reflections on generative AI are directions for further enquiry rather than findings established by the original study.

Read the full paper

Unlocking Value or Destroying It? A Comparative Framework for Private Equity and Strategic M&A in the Advertising Industry — Daniel Jones, Imperial College Business School, Executive MBA final project, November 2025. PDF, 136 pages.