The agencies don't get the markup the media buying companies do. They are to the advertising industry what realtors are to the housing market.
Most of the houses have no idea what they are doing, which only works because their clients are even more clueless.
It will change within the next 5 years and the media buying houses will be mostly gone with a few exceptions.
I'm curious what your thoughts are from there? Who does the purchasing?
Don't tell me it's all going RTB or something like that; premium advertising is still how the publishers are going to make money and you really can't automate that.
You are going to need high touch sales presence, bespoke custom executions, etc.
I'm definitely not going to miss the buyers.
And the big agency would go nowhere if it actually had to do the creative work.
and yes, when the client is clueless, there's lot of people in the way making money.
Advertising agency doesn't sell you a great campaign, idea or pretty pictures.
they sell you media. with a HUGE markup.
10mil media can cost way more than 30mil if bought from an agency creating the 'creatives' (in the case of car ads, a picture of the car, or a movie of it cruising on a road where the art director likes to take vacations)
30mil for 10mil of media, GM had a good deal.