Advertising’s confidence problem, according to the man who used to price its stocks

It’s a blunt assessment of a widespread practice — one that’s never short of example: Ad tech vendors spend entire conferences debating whether agentic AI will transact media autonomously. Brand-side finance teams haven’t been asked if they want it to. Holdcos tell Wall Street a story about AI-driven margin expansion and organic growth. Clients get a very different story about why their budgets keep getting squeezed. Agencies report up CPM, viewability and engagement. The CFO wants to know what it did for revenue. 

Whittaker’s view, then, isn’t cynicism so much as it’s the pattern-recognition of someone who’s spent years watching the industry do the same thing on repeat. Over that period, he realized the explanation came down to how money is made.

Previous generations of holdco leadership — not today’s, he clarified — built their businesses around media buying because it scaled. The more that happened, he said, the more it became an efficiency play. Creative got thrown in for free, treated as a bonus rather than a product with its own value. That gave away the one part of the offering that couldn’t be commoditized on price, and left media, the part that could, to set the terms for the whole relationship. Once an industry competes on price, its product becomes a commodity. That’s not an insult, in Whittaker’s telling. It’s just what the math does.

The proof, he said, is sitting in the metrics the industry already runs on. Take CPMs, for instance. No serious financial market would tolerate a metric that disconnected from actual value. And yet, advertising uses it every day. The result is an industry that spent a generation optimizing for scale and price gets treated like a commodity vendor by the people signing the checks, no matter how much AI gets layered on top.

Undoing that, he said, “will take a long time.” What he did say, though, was that the industry would need to move to a value-based conversation with clients instead of a formulaic one.

“Valuation is an art, not a science,” Whittaker continued, “and agency pricing should work the same way, built on judgment and a track record rather than a formula.” The problem, as he sees it, isn’t that this is impossible. It’s that the industry has “lost the confidence to have those conversations,” retreating into CPMs and cost-per-whatever because they’re easier to defend than an argument about value.

That’s not a fix holdcos can make alone, though. Advertisers have played their part too, squeezing agency fees, looking to past practices that ranged from murky to outright fraudulent, and rarely investing the time to understand where their money actually goes.

None of which appears to be slowing anything down. IAB Europe’s own numbers put market growth at 10.5% last year to €131 billion. An industry can, apparently, be self-absorbed, commoditized and short on confidence, and still keep growing. Whether that’s resilience or just a longer fuse is the question worth sitting with. Dysfunction and unsustainability aren’t automatically the same thing.