Category: In the News

As holding companies look to acquire each other to get even bigger, and private equity firms seek out independent agencies to buy and merge with others, there’s another direction some agencies have taken: the ESOP route. 

Employee Stock Ownership Plans, boiled down to their essence, are when an owner or founder sells his or her stake in an agency to the employees who all receive stock in the company, most often held in a trust. The employees are often fully vested within a few years of the transaction — and usually (but not always) cash in their value if they leave the company.

ESOPs have gained some favor in the media agency community since the pandemic, for a few reasons. For one, it’s a way of literally giving employees a stake in the health and future of their shop. It’s a way of trying to ingrain whatever culture has developed, as well as a retention and hiring tool. And for private owners, it’s a means of succession — a way of selling the agency without selling out to PE or a holdco. It can even be used as a shield against an unwanted acquisition. And it can have tax benefits too for the owner looking to cash in.

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The first half of the year brought no shortage of bluster: Amazon gunning for DSP dominance, Google locked in an antirust staring contest, publishers scrambling to offset traffic losses to generative AI, and Publicis staking up wins like its trying to corner the market. But somewhere between the sizzle and spin, fault lines are forming. Now’s a good moment as any to take stock — and make a few bold calls about what’s coming next. 

Google will start to soften its stance with third-party ad tech to appease the U.S. Government, as the Justice Department readies its regulatory scythe

The U.S. Department of Justice is pursuing a potential breakup of Google’s advertising technology business, alleging it holds an unlawful monopoly over the digital advertising supply chain, with the remedies phase of its ad tech trial due to start in September. 

Of course, this follows Justice Brinckema’s ruling in favor of the DOJ, and although Google has signalled its intention to appeal the decision, a process that would prolong the case by a matter of years, in anticipation of or response to such a remedy, Google is likely to offer several olive branches. 

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