UK ad agencies battle to stay ahead of tech

What do Brad Pitt, Ridley Scott, Danny Dyer, Salman Rushdie, Zone of Interest director Jonathan Glazer and Guy Ritchie all have in common? They started their careers making British ads - from Ridley Scott’s in 1984 for Apple through Rushdie’s ad slogans like “that'll do nicely” for Amex, Pitt's Levi's commercial in 1990 and Glazer’s epic surfer ad for Guinness, they honed their skills on big budget ads that made UK advertising world famous.

- Stephen Armstrong

Last week, British ad agencies revealed just how much trouble the industry was in — with Martin Sorrell’s S4Capital and the Saatchi brothers’ agency M&C Saatchi issuing profit warnings after Sorrell’s old agency group WPP criticised its own “unacceptable” performance after issuing a profit warning at the end of October.

Yet forecasts from the Advertising Association issued at the end of October predict that the total UK ad spend is set to rise by 8.2% to £46bn in 2025 and a further 6.6% to almost £50bn in 2026. How can ad agencies be struggling in a booming market?

“The ad agency is being pushed out of the market by the tech platforms,” said one senior agency figure. “Five years ago, agencies controlled maybe half of the UX’s ad spend. Today, that is probably 30%. Google deals directly with companies and the ad agency is gradually being disintermediated.”