• Chicago

Advertising’s Integration Transformation

By Steve Schneider, Executive Managing Director Cushman Wakefield Chicago

The television series Mad Men portrayed the “golden age” of advertising, but frankly Don Draper would be lost in a contemporary agency. Sure, there would still be coffee service and even spirits on occasion, but Don could look high and low for the typography department, typing pool, even the studio—formerly the heart and soul of an ad agency—and he’d be stumped.

Driven by digitization, we are currently living in a far more complex age where even the term advertising may not tell the whole story. The transformative changes witnessed within the past few decades have impacted client services, location decisions, space usage, recruitment, and ultimately the final product delivered to the client.

Agency Consolidation

Don’s era was based upon a simpler structure. General agencies created thirty-second television spots that ran on a handful of networks, crafted complementary print advertisements for a massive magazine and newspaper readership, and supplemented the campaign with direct mail from a below-the-line-agency. Few measures, fewer expectations. Or, as John Wannamaker famously said, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”

As the leading agencies consolidated under the umbrellas of holding companies, additional services such as public relations were added to the offering. Each agency within a holding company typically retained its own brand, leased its own space and shared services either gently nudged initially or later, demanded to by the holding companies themselves. Not exactly peak efficiency from a business perspective, but it worked and created memorable brands, taglines, and jingles that have lasted decades.

Results-First Approach

Gone are those days of bloated client advertising budgets and all-encompassing campaigns. Today’s integrated marketing must create content for dozens of segmented channels for a spectrum of demographic cohorts with extremely specific benchmarks to meet. This means agencies must run efficiently with client goals in mind at all times. It also means change is continuous—Michigan Avenue, Chicago’s answer to Madison, was THE location for agencies but the rise of pure digital shops has led to growth in Chicago’s emerging sub-markets.

What’s Next?

The industry is moving towards greater shared services, cost reduction and metrics that clients hold their agencies to. Our client Publicis has smartly moved from a Holding Company to a Connecting Company. The industry is moving toward a more focused strategy where clients are at the core and seamless services are the solution. Footprint compression, minimized capital, location consolidation, and a focus on attracting and retaining talent that is now competing not just with other ad/media companies, but with major tech players like Google, Facebook and Accenture, are all major tactics towards real estate strategy.

The advertising/media world has changed significantly even over the past decade. What was important to the ad/media world ten years ago (bright colors, glass offices, mix of private offices and cubicles) has evolved into today’s must-haves (benching, minimal offices, significant technology, cafés, flex hours, free food and drinks, open areas for spontaneous collaboration) to cater to the younger talent each agency has their eyes on recruiting.

Although the modern approach can reduce the square footage metric per person, it is increasing on the overall capital cost because office amenities are densified and cost more per square foot to absorb. Technology costs increase, HVAC can increase because of more bodies and equipment, as well as increasing restrooms and lounge areas for a denser footprint.

Further Densification

Over the next five years, we will continue to see densification as well as less seats per person, meaning that certain companies will have “free addresses” that employees will just sign in for when they arrive. The one seat per employee will continue to decline depending on the discipline of the position and other professional service firms will also continue to follow suit.


  • Chicago

© 2019 Cushman & Wakefield, Inc.