The Agency Matryoshka

The organisational charts of Holding Companies look cleaner than ever. Fewer boxes. Bolder lines. A single name at the top.

Don’t be fooled.

The advertising industry’s wave of consolidation - Omnicom’s acquisition of IPG being the most seismic - has produced something that looks like simplification but is, in fact, a new and more intricate form of complexity. The agencies haven’t disappeared. The holding companies haven’t collapsed into one. What has happened is stranger and more consequential: the structures have disappeared into each other like a giant Matryoshka Doll.

This is, what I call, the Agency Matryoshka. And it changes everything about how the industry actually works.

For decades, the criticism of holding company architecture was visible and legible. Too many agencies. Too many competing P&Ls. A client needing media, creative, data and PR would navigate a fragmented landscape of specialist fiefdoms, each with its own leadership, its own incentives, its own reluctance to collaborate. The problem was obvious because the structure was obvious. You could point to it on a slide.

The new structure isn’t like that. Post-Omnicom’s acquisition of IPG and the formation of Omnicom Advertising Group, what exists now is a local holding company nesting inside a regional holding company that nests inside a global holding company. Each layer legally distinct. Each layer with its own P&L logic. Each layer with its own definition of what integration means and who it serves.

But the nesting doesn’t stop there. Within these holding structures sit the network brands - BBDO, McCann and TBWA. Within those networks are the remnants of FCB, MullenLowe and DDB. And within those, in markets like India, sit even older agencies: Lintas, Ulka and Mudra. Heritage agencies with their own histories, their own cultures, their own client relationships - now operating as agencies inside agencies inside holding companies inside holding companies. Open one doll. There’s another. Open that one. Another still.

The rumoured emergence of WPP Creative as a distinct entity carved from WPP’s broader portfolio points in the same direction. Rather than one holding company governing a portfolio of agencies, the industry is gravitating toward capability-based or geography-based sub-holdings, stacked inside one another. Another Matryoshka Doll in the making.

The visual simplicity of the new org chart is not evidence of genuine simplification. It is evidence of complexity made invisible.

This matters enormously for the industry’s central promise to clients: horizontality. The idea that a holding company can marshal its full capabilities - media, creative, data, technology, PR - around a single client challenge, with unified accountability and no internal friction. It was always difficult. The Agency Matryoshka is new integration theatre. A structural shortcut that lets the industry avoid the hard, cultural work that real collaboration requires.

Because every nested layer has its own survival instinct. The global entity wants integrated solutions. The regional entity wants market share. The local holding company wants margin protection. The legacy network brand wants creative prestige. The specialist unit wants to protect its turf from being absorbed. Multiple dolls, multiple competing imperatives, one client brief traveling through all of them - losing momentum, coherence and speed at every boundary it crosses.

The boundaries haven’t been eliminated. They’ve been internalized.

The entire purpose of the Matryoshka structure, as sold to clients and investors, is simplification of access. One conversation. One contract. One point of accountability. The complexity of capabilities hidden behind a single, elegant surface.

But here is the contradiction the industry refuses to name - the client sees one doll, but inside, there are many more. Each with its own face, its own agenda, its own version of what the work is supposed to accomplish. The promise is a unified front. The reality is a negotiation between nested interests that the client never sees but absolutely feels - in slower decisions, in diluted creative, in the gap between the pitch and the work.

The holding companies that navigate this successfully won’t do it by redrawing the structure again. That impulse - another reorganization, another integration announcement, another ‘Power of One’ narrative - is itself part of the problem. Structure alone cannot solve what structure created.

What’s needed is something harder to build and harder to see on a slide: a common language for value that travels across the nested layers rather than getting absorbed by each one. Shared incentives. Performance metrics that cross P&L lines. A definition of winning that means the same thing at the global holding level as it does inside the local network agency doing the actual work.

The Matryoshka Doll is a beautiful object. Intricate. Satisfying. Deceptive in its apparent simplicity.

And that gap - between what the structure promises and what it delivers - is where the industry’s credibility is quietly draining away, one nested layer at a time.