Tuesday, August 29, 2023

Hello, My Acronym Is.

For decades, the world of technology--and the social media channels so many of us spend so much time on and which propagate so many untruths and evils--was dominated by five companies.

The acronym for those companies, Facebook, Apple, Amazon, Netflix and Google was, appropriately, FAANG.

Today, FANNG has been replaced by MAMAA. Meta, Alphabet, Microsoft, Amazon and Apple. MAMAA is much less threatening sounding than FAANG, unless you knew my mother, you're Norman Bates, raised by Joan Crawford or you're Oedipus.

On Sunday there was an article in "The New York Times," that you might want to take a second to read. It's called "The Price Americans Pay for Corporate Consolidation," and you can read it here. Or you can read my slight abridgment, below. 

industries rapidly consolidated until the United States was left with four major airlines, three major cellphone companies and two dominant makers of coffins. A 2018 analysis concluded that concentration had increased in three-quarters of domestic industries, giving companies more power to raise prices, squeeze suppliers, suppress wages and influence policymakers.

Americans have been living as subjects in a large-scale experiment in letting big companies do as they please, and the consequences are increasingly apparent in daily life...   

North American airlines pocketed more than twice as much in profits from each passengein 2022 as their European counterparts did. 

The internet costs more, too: Americans pay more than twice as much for broadband, and the cost of cellular service is also, on average, more than twice as high in the United States as the average in other developed nations. 

The American economy would be roughly $1 trillion larger than it is today if the United States had simply maintained the level of competition that prevailed in 2000.

Given this information, it's hard for a lifelong denizen of the advertising industry like me not to lament the concentration of our business. When I started in the agency business in 1983, there were literally hundreds of agencies in New York--and probably 50-75 agencies large enough to handle large national, even international accounts.

Today WPP, Publicis, Omnicom, Interpublic and Dentsu control about 75-percent of the jobs and the billings in the entire industry. I assume the effects of consolidation are the same regardless of industry and advertising is subject to, therefore, monopoly pricing, squeezing suppliers, suppressing wages and more, as described above. 

This is conjecture only (because there's no independent press covering the ad industry) but I'd imagine in real dollars, wages in the ad industry are lower today than they were 50 years ago.

As a service to the industry, I've created an acronym for the oligopoly that runs our lives and has ransacked our industry. It's not as good as MAMAA. And certainly not as good as FAANG. But from this point forward, or until there's further consolidation, I'm calling WPP, Publicis, Omnicom, Interpublic and Dentsu, DIPWOO. 


Feel free to improve upon this. 

Until then, let's do our best to DIPWOO.

No comments: