We think the agency holding company model is an attractive and defensive way to play accelerating economic growth. Ad agencies are agnostic to changing technologies and customer behaviors and continue to be the connective tissue between market data and emotive brand concepts - a value that remains relevant today despite competition for customer analytics. Holding companies like Omnicom (OMC) and Interpublic Group (IPG) are able to limit industry/client risk through a portfolio approach, leaving investors with the systemic risk of business cycles within key markets. Coupled with effective management and ~6% yields on capital returns, we believe these are resilient businesses without the secular uncertainties of Media companies.
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