By Jon Bond, TOMORRO
The holding company model has been virtually unchanged for decades until now. Here are advertising legend, Jon Bond's 10 predictions for the future of holding companies:
1. Their core business will become managing complex systems. Marketing isn't getting any simpler or easier.
2. The FTE will go away and be replaced by deliverables-based compensation, and eventually results-based.
3. Holding companies will stop taking kickbacks and opaque billing practices will disappear. However, they will soon learn to game the system in results-based compensation and devise clever ways to fake results or take false credit for success- much like the way the Mafia moves from drug running to prostitution when the DEA puts the heat on.
4. Holding companies will reduce their overhead by 75% and tech people will replace most of the finance people in the center. Tech will be centralized across all agencies. Holding companies will leverage the enormous volume of revenue they can drive to firms through corporate stock deals, since cash based billing will have become impossible.
5. The brand will replace AOR with TOR (tech of record) and the marketing tech stack will be the base with agencies variable.
6. A tech company will purchase a major holding company.
7. In a results-based compensation model, high performing Agency personnel will make 10x more than low performing personnel with the same experience level-mirroring Wall Street.
8. The creative director role will transform into head curator and creative will move from closed to open systems.
9. A holding company run by talent/practitioners will form, similar to Dream Works.
10. Niche holding companies will form to provide specialties at scale versus all of them being pretty much the same.
11. A "virtual" holding company that doesn't own anything will emerge with the competitive advantage of objectivity, low overhead, and enormous scale; similar to the way Uber and Airbnb have disrupted the travel and transportation industries.
TOMORRO\\\ is a Virtual Holding Company that operates as a consultancy, working directly with advertisers to solve their biggest pain points and setting up unbiased solutions to implement anywhere in the world.