Japanese agency Denstu is the most valuable agency brand in the world at $1.3bn according to consultancy Brand Finance, ahead of McCann Erickson Worldwide on $793m, Ogilvy & Mather on $645m and TBWA on $560m.
But it is only the fifth most valuable holding company (Dentsu being Dentsu’s only significant brand) behind WPP, Omnicom, Publicis and Interpublic.
Brand Finance founder and CEO David Haigh says he reckons agency brands are undervalued, pointing out the durability of this lot points to the ones likely to show the most “significant growth” in the future.
The agency valuations certainly seem on the low side when you consider that Martin Sorrell (as he then was) paid $864m for Ogilvy in 1989 (and $566m two years earlier for JWT which is now presumably worth less than TBWA’s $560m).
Both these companies also had other significant brands and activities outside mainstream advertising such as JWT’s Hill & Knowlton PR outfit and O&M Direct. So maybe that makes a difference.
But on the face of it they don’t look such brilliant purchases, although owner WPP has hardly suffered in the meantime.