Consolidation vs Fragmentation in Creative Production

The creative production ecosystem needs attention

The rate of transformation in the creative production ecosystem is outpacing the ability for many marketers to keep up with change. Now, more than ever, it’s clear that creative production needs a new model.  

Technology pushed the boundaries on what can be achieved across the creative production landscape. Advertising started out with TV and print media and has blossomed into full blown ecosystems of omnichannel content streams. A seemingly endless need for creative has left C-level and their marketing teams overwhelmed with a relentless demand for content creation, all while facing global budget clamp downs. With limited resources, teams are often understaffed, and there can be a revolving door of talent.    

Enter Holdcos. In the advertising industry a holding company owns a collection of agencies that specialize in all sorts of services covering media, creative, production, data, and more.  

A fully integrated model run by a holdco promises a connected and robust media, creative and production ecosystem, creating perceived ease for marketers. But does consolidation make creative and production “easy?”  

The consolidated model can be perceived as self-serving to an all-inclusive solution. Today’s small businesses power the ideal creative and production process around the globe, and marketers need those smaller independent companies to be included in their partner rosters. Without those specialists who are hyper-focused on developing their solutions and talent skills, a marketer’s content creation ecosystem could miss out on the talent and specialists, diversity, and a variety of new solutions.  

Let’s dive a bit deeper into the different models that brands have established within their creative production ecosystems, and surface core insights that allow brand marketers, creative operations, procurement teams, and in-house agencies to better understand the pros and cons of various models.  

What is consolidated production?

When a brand centralizes the production of all creative assets with one partner, they’re working in a consolidated production ecosystem. As content demands across the funnel expand, marketing teams look outside of in-house talent to develop a full spectrum of partners in search of capabilities that don’t exist, such as directorial talent, new production innovation, or technology. Highlighting comprehensive service offerings, integrated agencies aim to provide a seamless, all-in-one solution.  

The “consolidation curve” used universally for markets, clearly points to a natural ebb and flow of consolidation in any business model: Open → Scale → Balance → Balance and Alliance. This model indicates speed and agility as a top priority — work fast or get worked over. Much like a centralized internal infrastructure, brands assume that centralization nurtures optimized workflows.

Consolidating Creative can Provide:

“There has been consolidation of the $700 billion global digital ad market down to a handful of global tech media players. Is that dangerous for brands and the broader marketing supply chain?” asks Mi3, a digital news source focused on the marketing industry.

This level of distillation can come at a cost, binding brands to long-term contracts where the true beneficiary remains unclear. Even the Pentagon recently noted that consolidating military suppliers has raised costs and hampered innovation. And while centralization is an obvious choice in areas like production insurance, talent payroll, and tech stacks, centralization around creative production involving producing assets like video, film, photography, and music, may introduce new problems influencing consistency, creative quality, and workforce diversity.

“It’s all about creating a flexible framework that allows the brands to centralize their core operations while integrating seamlessly with specialized partners like APR and the TEAM companies,” says Justin Morgan, Head of Product at AdFusion from Comcast Technology Solutions. “This flexibility is crucial because in today’s rapidly evolving marketing landscape, brands really need to be able to adapt to new demands without sacrificing control or efficiency.”

And holdcos are now seeing several challenges — “interest rates, which continue to be high, inhibiting access to cheap funds; the uncertain effect of generative AI on the agency business, particularly the creative and production sectors; and the fact that a holding company like WPP is too complex to swallow in one acquisition bite.” notes Digiday Media.

Consolidation can feel easy to manage from the perspective of a brand marketer, but ultimately this one-stop shop in a partner may limit choices, excluding brands from the creative marketplace and contributing to limited innovation and diversity amongst creative suppliers.  

What is fragmented creative production?

A fragmented creative production ecosystem is a decentralized approach to creative production, empowering both production houses and specialist companies to play a crucial role in developing and growing creative directorial and editorial talent, among other roles in the creative production process.  

Typically, a competitive bidding process is utilized to find the right company to produce content. A roster of more than one supplier partner introduces a few benefits to the brands and their creative production process.

→ Options for directors.

→ A view to innovation or different production approaches to achieve optimal results.

→ A backup plan if Plan A or B doesn’t work out.  

→ Potential negotiated savings in a competitive bidding process.

Regarding repurposing content, “It’s really easy to lose sight of who’s holding the button when you’ve got so many players,” says Rori Floyd, Senior Vice President of Global Business Affairs and Payroll Operations at The TEAM Companies. “We found that having someone stand in the gap to ensure there is a seamless communication, understanding of ownership, and the cost associated with that, has saved many clients tremendously, especially when it comes to unauthorized usage of content.”

Data from ACERO™ — APR’s proprietary database of creative spend management — helps to illuminate the reliance of fragmentation in creative on a global scale. In recent years the APR Index (r) in the ACERO™ database has recorded a 26.5% rise in unique deliverable combinations, a testament to the increasing specificity of creative assets being produced by brands across the board.  

On top of that, one-third of APR’s client base is currently working with 100+ different production partners to service the demand for content. Consolidation may limit supplier diversity, yet in contrast, a fragmented ecosystem of creative production partners can nurture diversity, innovation, and quality of creative. Managing a marketplace with more variety and options is how the advertising industry has worked for half a century.    

A fragmented creative production ecosystem:

“Building a streamlined creative production ecosystem of preferred suppliers is even more crucial now than in past years. With the centralization of production, content can seem mundane and templatized. Some areas in production can and should be centralized, but this model is not a one size fits all — introducing a variety of companies in a curated creative network, helps to produce the best quality creative,” APR Founder, CEO & Author Jillian Gibbs.

The assumption is that managing a series of outside suppliers and vendors can become burdensome, leading to inefficiencies and tension, forcing internal teams to juggle multiple projects.  

However, when coupled with a flexible structured framework, the inherent complexities of the content workstream can become easier to manage. It’s the “structured” part of the framework, production guidelines, and ways of working that can help to mitigate risks from inefficiencies across the content creation workstreams.  

“Integration is key to ensuring that advertisers maintain transparency and compliance across the entire creative production process,” says Morgan. “It enables brands to avoid common pitfalls such as miscommunication between teams or costly delays caused by those siloed systems.”

What should a brand consider the best choice?

Change starts with addressing some of the key challenges. Many brands in recent years lack the necessary granularity to measure individual production costs and the benefits of their investments in production spend because it is either managed by their agency or dispersed across many internal and external resources.  It’s clear the industry needs to get better at serving content demand, complexities, and budget cuts.  

So, how does a brand create the infrastructure and framework to capture and enable the benefits of fragmented creative production? Structure. Having a framework to support a diverse creative network while ensuring brand compliance and consistency of process is critical.

Flexible Framework

Typically, 20% of the annual marketing production budget is wasted due to lack of governance or oversight. For example:  

• Duplication. Duplication of work across both internal production studio functions and across the agency or holdco networks.

• Internal inefficiency. Managing decision making across internal stakeholders can add time to the creative production process.

• Perspective. We often see advertising and marketing investment assigned to creative production in silos missing the opportunity for a 360-degree production approach.

• Organized asset libraries. Assets are stored in many digital libraries without appropriate management, making it difficult to repurpose assets.  

Focusing on production at the ecosystem level gives brands the opportunity to plan a more coordinated and effective approach to production, mine their data, organize existing assets, and manage the assignment of work to appropriate partners.  Production is moving toward having more awareness around options for creative, moving from execution into intelligence. A new model should include:

• A flexible framework to engage specialists and right-fit partners.

• Measuring value by connecting media, creative, and production to truly identify when value is being felt.

• An overarching production strategy, early and holistically across all platforms, such as having a total video strategy vs a sole focus on the individual creative campaign.

• Evaluation areas for successful consolidation in production and leveraging a fragmented ecosystem.

“Today’s marketer needs to decide how best to understand and manage their ecosystem, getting more involvement from marketing, procurement, and marketing operations,” says Gibbs. “The rise and influence of these internal category leads and teams is crucial to the success of any tools, systems or processes that are implemented.”

To achieve savings, efficiency, scale, and exponential value, APR guides brands toward a supplier ecosystem strategy, which helps to align business goals with purpose and spend validation improving YoY budget management, ROI, and preventing costly mistakes.

Whether brands opt into a consolidated approach or tap into the creative and financial freedom of a fragmented content production ecosystem, the real winners will introduce production governance as the true north star to support a successful content creation across any model.  

Take the Next Step

APR helps to organize and orchestrate your production ecosystem by assessing and customizing the most impactful model tailored specifically to meet the needs of your business.

On average, we generate a remarkable 4-6X return on investment, driving efficiency, innovation, and supporting your creative and production partners to be most effective for you.  

Contact us today and experience tangible improvements in your content creation ecosystem of partners, tools and business processes. We guarantee you will realize improvements in operational performance, ROI, and gain governance over creative agency and production spend.

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