Who murdered Madison Avenue?

How did ad agency economics become so challenging? Fee-cutting and low growth are part of the equation, but the roots of the issue go back decades. Ad industry analyst and author Michael Farmer joins WARC's David Tiltman to discuss his new book 'Madison Avenue Revisited' and offer his take on 30+ years of change to advertising business models, including the impact of dysfunctional client-agency relationships, increased creative workloads and AI.

Guests:
Michael Farmer, Chairman and CEO, Farmer&Co; Professor of Branding and Integrated Communications at The City College of New York
David Tiltman, SVP - Content, WARC

Chapters:
[00:00] Introduction: Michael Farmer joins The WARC Podcast
[06:49] From 'Madison Avenue Manslaughter' to 'Madison Avenue Revisited'
[11:25] How ad agency workloads doubled while fees halved
[18:29] Why big advertisers are underperforming GDP
[23:44] Short-termism and the failure to brief for brand growth
[27:51] The key factors undermining advertising economics
[30:11] Artificial intelligence threatens advertising agencies
[32:28] 'Infinite creative' doesn’t equal brand growth
[35:18] Using AI to fund strategy and reinvesting in senior talent
[37:01] How hold-cos, commissions, and cheap CPMs undermined creative value
[40:29] Why do CFOs block long-term marketing investment?
[41:02] How AI can optimise the marketing mix for growth

For 40 years, WARC has been providing the marketing industry with rigorous, unbiased evidence and expert effectiveness guidance. The WARC Podcast publishes a new episode every Tuesday and Thursday. 

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