The Unbundling of Advertising Agency Services: An Economic Analysis : Review of Marketing Science uses cookies, tags, and tracking settings to store information that help give you the very best browsing experience.
To understand more about cookies, tags, and tracking, see our Privacy Statement
I accept all cookies for the De Gruyter Online site

Jump to ContentJump to Main Navigation

Review of Marketing Science

Ed. by Rao, Ram C.

SCImago Journal Rank (SJR) 2014: 0.104

30,00 € / $42.00 / £23.00

Get Access to Full Text

The Unbundling of Advertising Agency Services: An Economic Analysis

1American University of Sharjah

2Massachusetts Institute of Technology and National Bureau of Economic Research

3U.S. Census Bureau

4Harvard Business School

Citation Information: Review of Marketing Science. Volume 10, Issue 1, ISSN (Online) 1546-5616, DOI: 10.1515/1546-5616.1164, December 2012

Publication History

Published Online:


We address a puzzle surrounding the shift from bundling to unbundling of U.S. advertising agency services and the slow pace of change over several decades. We model an agency’s decision as a tradeoff between the fixed cost to the advertiser of establishing a relationship with an agency and pecuniary economies of scale from media services provision. Using micro-data from the U.S. Census of Services for 1982-2007, we find agencies are more likely to unbundle with increasing size, diversification and higher media prices, and less likely with increasing age, larger media volume, and an interaction between media prices and volume.

Keywords: bundling; ad agency services; commission compensation

Comments (0)

Please log in or register to comment.