Just how much will the world's communication supergroups have to reinvent themselves to meet changing client demands? And - most importantly - where will their future growth come from?
Two factors made both questions particularly relevant in 2005. One was the ongoing anguish at Interpublic, which laid down the holding company template in the 60s but is now seen as the embodiment of its failings.
The other was the emergence of what industry watchers are calling a "two-paced recovery" between the traditional media and the faster growing new media; and between the mature markets of the US and Western Europe and the emerging economies, particularly those of "new" Europe, Latin America and Asia, which are expanding more quickly.
Europe's economy has been stagnating (the UK's 1.5 per cent growth rate in the second quarter of last year was the lowest for 12 years) while China is already the world's second-largest TV ad market. Little wonder, then, that analysts now predict that the holding companies widely exposed to the faster growing areas of the industry will prosper the most.
It is also no surprise to find that holding-company chiefs are making regular sweeps through Asia-Pacific.
WPP's Sir Martin Sorrell spent almost a month there last year; Omnicom's John Wren expects to visit the region at least five times in 2006.
WPP ascribed its 32 per cent hike in pre-tax profit for the first half of last year mainly to its success in the new forms of interactive communication and in the Latin American and Chinese markets.
"China is growing for us at 22 per cent and India at 13 per cent," Sorrell said in October.
Wren, meanwhile, has pledged to bolster his network offerings in Asia by importing expertise from other markets and to increase its business in India and China significantly.
And it can surely be no coincidence that Aegis, the media buying company that was subject to an end-of-year tug of war between WPP, Publicis Group and the Havas chairman, Vincent Bollore, has, in Carat, the biggest media network in Europe and the fourth largest in Asia-Pacific.
Behind all the jockeying and rivalry, however, questions persist about what the future shape of the holding companies should be. IPG's plight has highlighted what happens when a reckless acquisition policy is not properly controlled, and its chief executive and co-chairman, Michael Roth, a year into the role, has the thankless task of clearing up the mess.
At the same time, WPP's loss of Samsung's global creative account after less than a year is bound to extend the debate about the wisdom of the big groups choosing to forget that the reason they were set up was to manage conflict and allow clients to cherry pick their services.
Against that background, it will be interesting to watch developments at Omnicom, where Wren is busy adding key marketing services to each of his BBDO, DDB and TBWA networks. His intention is to transform them into mini-holding companies, each strong enough to challenge the likes of WPP and Publicis Groupe.
Full-service networks offering "one-stop shopping" to clients? Now that sounds familiar.
THE RETURN OF SIR FRANK
A powerful sense of deja vu pervaded Britain's ad industry during 2005.
WCRS regained its previous independence and Kevin Brown's return to Bartle Bogle Hegarty fuelled the debate about whether full service was making a comeback in a different guise. And there was Sir Frank Lowe.
Dismissed by his detractors as yesterday's man, the always eccentric, frequently brilliant and totally unpredictable Sir Frank refused to be consigned to history. He emerged from two years of industry exile to exact terrible revenge on those he believed had wronged him.
The result: the advertising story of the year, managed by Sir Frank in typically mischievous fashion. He allowed a 30-word press release announcing his agency start-up to be issued before going to ground and watching from a safe distance as the hype fed upon itself. It culminated in the plundering of the £50 million Tesco account from the London agency bearing his name.
Whether the return of a legend is symbolic of an industry re-examining and exploiting its past strengths in order to secure its future remains to be seen. Sir Frank is, in part, a throwback to advertising's more extravagant and flamboyant age. Yet he has always redeemed himself by being a passionate advocate of creativity as the route to profitability, rather than seeing profits as an end in themselves.
An outdated and naive concept in an industry increasingly dominated by corporate leviathans? Perhaps. Others clearly saw it as symptomatic of a business going back to basics, reasserting its values and putting client service ahead of self-interest.
Other events last year certainly lent weight to this theory. For one thing, there was BBH's rehiring of Brown as its leading media thinker, the most high-profile appointment in what seems to be a growing effort by creative agencies to put media back at the heart of what they do.
Then there was WCRS's final extrication from Havas at a cost of more than £13 million. Selling up was the main theme among the independents, with Miles Calcraft Briginshaw Duffy, VCCP and Delaney Lund Knox Warren & Partners all doing multi-million-pound deals.
They made attractive acquisition targets, given that big-spending multinational advertisers remain inclined to align with smaller, anti-establishment operations. While Wieden & Kennedy won the film Grand Prix at Cannes for its Honda "grrr" spot, the network joined Mother as a major player on the Coca-Cola roster. Meanwhile, Clemmow Hornby Inge continued to loosen Saatchi & Saatchi's grip on Toyota and DLKW plundered McCann Erickson's share of GM.
It will be intriguing to see whether a bunch of such hungry young things can hold their own against an indefatigable sixtysomething.
MEDIA AGENCIES - MANAGEMENT
While the macro forces of fragmentation and globalisation continued to dominate the media agency world, 2005 was characterised by a management merry-go-round at UK agencies.
WPP's Group M began to take shape with a tangible management team. MediaCom's Steve Allan became the UK chief executive, while Kelly Clark was promoted from chief executive of MindShare UK to chief executive of Group M Europe.
The reshuffle resulted in new chief executives at the two WPP agencies - Jed Glanvill at MindShare and Nick Lawson at MediaCom - who were both promoted from within.
There was much toing and froing at the Aegis powerhouse, Carat, which gained a new managing director, Neil Jones, appointed from within. Mark Jarvis, however, left his post as the head of media to join former Carat colleagues Colin Mills and Jenny Biggam as a founder of the7stars, the first full-service media agency to launch since Walker Media in 1997.
All this went on against a backdrop of uncertainty about the ownership of Aegis, with potential bidders (including WPP and Publicis) apparently circling the company before moving on. This left the Havas predator, Bollore, to increase his stake to more than 25 per cent.
Nigel Sharrocks, the chief executive of Aegis Media UK, brought in a new management team at Vizeum, with BT's Grant Millar sharing the managing director role with Vizeum's former strategy director, Matt Andrews.
There were important management changes at both of Omnicom's OMD agencies: OMD UK's top planner, Mark Palmer, left the agency and Manning Gottlieb OMD's Robert Ffitch was promoted to managing director. PHD capped a return to form with the news that Omnicom was to roll it out as a global network.
Interpublic attempted desperately to put its media house in order. It established IPG Media, led by its new chief executive, Mark Rosenthal, and installed Nick Brien as the worldwide chief executive and president of Universal McCann.
Transparency became the big issue when Interpublic vowed to return undeclared income - such as unpaid media-owner bills - to clients. Initiative's buying for Tesco was one case that came under the microscope. It remains to be seen whether similar pressures build on other agency groups.
Meanwhile, reports circulated that Publicis was joining the consolidation game. Jack Klues, the chief executive of Publicis Groupe Media, confirmed the holding company was considering forming joint buying operations in some markets. How this will affect Starcom and ZenithOptimedia in the UK is not yet clear.
The pressures on smaller agencies became all too apparent when The Allmond Partnership closed after it lost BT's TV buying to Starcom and Weetabix to Walker Media.
On the communications planning front, Naked Communications bolstered its offer by hiring Ivan Pollard as a partner from Ingram.
It was a tough year in an advertising market that was up one month and down the next. Stability will be welcome in 2006.
DIRECT MARKETING AGENCIES
DIGITAL ARMS RACE
If tough market conditions make for an innovative sector, this would explain the burst of activity that characterised the year in direct marketing.
As direct mail volumes continued to fall, the need for expertise in direct communications across a wide range of media increased.
Those already strong in multi-disciplined direct marketing, such as Rapier, Campaign's Direct Agency of the Year, were well placed to benefit. But as online communications became a more sophisticated and effective way of reaching customers, it was digital that the leading agencies focused on.
Archibald Ingall Stretton launched its digital division, dais, and Claydon Heeley Jones Mason moved closer to its online sibling, Agency Republic, in a restructure that placed digital at the heart of a new below-the-line group of agencies called Zulu.
Agencies with existing digital offerings such as Proximity London, Craik Jones Watson Mitchell Voelkel and Tequila\London increased their staff numbers considerably, while Harrison Troughton Wunderman lured the digital creative director, Jon Williams, from Publicis Dialog. Tequila bolstered its mobile marketing efforts through a global link-up with the mobile software company Enpocket.
The industry witnessed a levelling of budgets in the second quarter of 2005 - it was the first time that budgets were revised down in almost two years, according to the IPA's Bellwether Report. Despite this, there were still some sizeable account moves, benefiting agencies of all types.
WWAV Rapp Collins won Capital One's £10 million business and Partners Andrews Aldridge landed places on the BSkyB and Vodafone rosters. The start-up Stephens Francis Whitson beat an impressive shortlist that included WWAV and Craik Jones to More Th>n's £10 million business.
Joshua and Tullo Marshall Warren, meanwhile, benefited from Glaxo-SmithKline's move into relationship marketing and the latter agency triumphed in the consolidation of the Lloyds TSB roster alongside Partners Andrews Aldridge.
There were some interesting staff moves over the course of the year. The creative team Brian Storey and Xanthos Christoudolou quit Joshua to found an agency called Wand, while Steve Broadhurst followed them out of the door to join Rapier's ever-expanding senior creative line-up.
The year's biggest surprise was the defection of the Claydon Heeley chief executive, Nigel Jones, to FCB, which prompted a restructure at his former agency. Kate Waters started 2005 in a new job as the planning partner of Partners Andrews Aldridge. HTW hired David Reed as the planning director and John Howkins as consumer planning director to fill the gap that opened up when Miranda Ross departed the agency and moved to glue London.
Draft London's new managing director, John Minnec, preferred to appoint Brian Dargan and Erminia Blackden as joint planning directors to replace Karen Enver, who moved to Lida to take an equivalent role.
This was the year when everyone started talking about digital marketing. According to figures from the Internet Advertising Bureau and PricewaterhouseCoopers, the internet became a billion-pound advertising medium in 2005. Bigger budgets reignited interest from networks that had all but ignored the web since the dotcom crash.
M&C Saatchi launched its digital business, Play, at the start of the year with the former itraffic directors, Jon Sharpe, Ethan Segal and Matt Gorzkowski. Saatchi & Saatchi hired Tribal DDB's Neil Hughston in October to be the managing director of its digital unit.
It was not all one-way traffic. In November, Media.Com's management team, Nick Suckley, Pete Robins and Rhys Williams, left to set up Agenda 21, a business designed to advise clients on digital strategy.
The consolidation continued, with independent shops taking calls from potential acquisitors almost weekly. The biggest deal came in August, when the Aegis digital network, Isobar, bought Mark Cridge's glue London for £14.7 million.
International expansion was another key trend. At the end of the year, the largest digital agency in the US, AvenueA/Razorfish, ended its long search for a UK digital agency by buying DNA. Another US agency, R/GA, opened a London office in March to service its new Nokia account. GlaxoSmithKline, Coca-Cola and L'Oreal all started pitches for their global digital accounts.
In the UK, however, there remained relatively few high-value digital creative pitches. Grand Union won the £7 million Abbey business in April, Dare picked up the £15 million AA account in August, Agency.com won Ladbrokes and Modem Media triumphed in the battle for Lloyds TSB's digital account.
There were more digital media pitches, including big pieces of business for Orange, BSkyB and the AA - all won by i-level. BT went the other way, moving to ZenithOptimedia's Zed after i-level resigned the business.
The client doubled its online budget to £15 million.
This was also the year that digital independents enjoyed a massive growth in revenue almost across the board. As a result, many of the best agencies now decline to pitch for project work, and clients that insist on awarding business this way are now being forced to resort to the second-tier agencies.
The biggest challenge for the independents in 2006 will be finding enough staff to work on the ever-increasing volume of business that continues to move into the sector.