76 Marketing Trends found for Agencies / Digital

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Ad Agencies Face Growing Threat from Data Giants

Bottom Line: Spurred by the current data-driven marketing upheaval, data management firms are muscling-in on the territory occupied by ad agencies.

As marketers increasingly associate digital and transactional data with customer loyalty, CRM [customer relationship marketing] specialists such as Experian, Epsilon and Merkle have started to invade agency turf, buying or building ad technologies and digital marketing capabilities that range from ad targeting to mobile-app development. Moreover, ad agencies are also under seige from ...

[Estimated timeframe: Q3 2013 onward]

... multinational management services companies such as Accenture, PwC and IBM.

Merkle chairman/ceo David Williams now sees companies like Experian and Epsilon as competitors: "We are competing more and more with the professional services firms", he says.

The latter company is branching into marketing services with the additions of Hyper Marketing (acquired November 2012), which offers social, mobile and retail agency services, and Aspen (acquired May 2011), which bolstered Epsilon's email-marketing, mobile, creative and loyalty capabilities.

Epsilon expects growth to ride on agency revenue. In second quarter, for example, its data business was flat year-on-year, although its agency business more than doubled. 

According to the Ad Age Data Center, the firms breathing hardest down the necks of ad agencies are ...

  • Epsilon (owned by Alliance Data Systems): Global revenues in 2012: $1.2bn (percent change from 2011 plus 6.7%)
  • Experian (owned by Experian Marketing Services): 2012 revenue: $947m (percent change from 2011 plus 19.7%)
  • Acxiom: 2012 worldwide revenue: $823m (percent change from 2011 plus 6%)
  • Merkle: 2012 global revenue: $318m (percent change from 2011 plus 4.9%) 

Despite which Todd Cullen, global chief data officer at Ogilvy & Mather claims to be unconcerned.

"I don't feel threatened" by data firms building-out agency services, avers Mr Cullen. "I don't see their ability or intent to use the data for anything besides direct marketing campaigns." 

Now why does the term "whistling in the dark" spring to mind?

Read the original unabridged Ad Age.com article.

All data sources are attributed with links to the original insight. The insight is then summarised and, where appropriate, enhanced with additional information.

Source: AdAge.com
MTT insight URL: http://marketingtrendtracker.com/article.aspx?id=6162

Google Set to Invade Display Ad Market

Bottom Line: Google has unveiled plans to control the next era of digital marketing - in effect declaring war on media and ad agencies. 

Google’s self-proclaimed goal is to become the world's leading one-stop shop where advertisers and publishers can buy ads on websites, mobile phones, social networks, apps, and whatever other new media is eventually spawned by the internet. The Mountain View mammoth's chosen platform for this coup d'état is ...

[Estimated timeframe: Q3 2013 onward ]

... its new Double Click operating system for digital marketing. 

In a perceptive article, Forbes.com columnist Robert Hof cites the proliferation within today's online advertising industry, in which "hundreds of well-funded online ad technology companies have sprouted up in recent years, each aiming to make it easier and more efficient for marketers to reach just the target audience they want". 

Mr Hof quotes Interactive Advertising Bureau ceo Randall Rothenberg, who stated at a recent advertising industry conference: “Venture capital has supported and financed a bunch of chaos".

The existence of so many competing products has made placing ads online and measuring their impact more complicated and cumbersome than ever.

The result, writes Hof, is that "most ad dollars, nearly $200 billion a year, still get spent on television because it’s so much easier".

Google will unveil its initiative today at a private Future of Advertising event hosted by its DoubleClick display-ad management and technology unit.

Google already dominates 60% of the online ad business – specifically small text ads that appear on the right and top of search pages.

Now Google has its set its sights on the remaining 40% of the online display advertising market - the graphical and video banner ads familiar on virtually every commercial website - which is currently is valued at around $25bn worldwide.

For ad agencies and media owners the mot-juste 'frenemy' coined, by WPP Group's ever-perceptive ceo Martin Sorrell back in 2009, will seem more painfully apt than ever.

Read the original unabridged Forbes.com article.

All data sources are attributed with links to the original insight. The insight is then summarised and, where appropriate, enhanced with additional information.

Source: Forbes.com
MTT insight URL: http://marketingtrendtracker.com/article.aspx?id=6108

Marketing Giants Predict Ongoing Budgets Squeeze

Bottom Line: Major US advertisers expect to see a continuing squeeze on marketing budgets in coming years - a trend likely to be replicated in Europe and beyond.

Despite improvements in the American economy, a "vast majority" of multinational US advertisers (82%) continue to push for cost savings and marketing budget reductions, reports the Association of National Advertisers [ANA] in its seventh annual Recession Survey.  According to ANA president.ceo Bob Liodice: “The ‘new normal’ for marketers is an environment that ...

[Estimated timeframe: Q2 2013 onward]

... challenges brands to grow earnings through improved marketing effectiveness and increased spending efficiencies to cut costs.”

Continued Mr Liodice: “Companies expect technology, expanding media platforms and better decision making to better enable marketers to pursue earnings growth objectives.” 

The survey found that marketers are continuing to challenge their agencies to lower costs. However, only 15% plan to cut agency compensation - a significant decrease from 2009 when 56% of marketers squeezed their agencies in this way.

Perhaps more significantly, the research also reveals that from 2013 onward marketers will focus on other means to lower costs and expenditures, including reductions on:

  • Travel (58%)
  • Internal agency expenses (55%)
  • Advertising campaign media budgets (46%)
  • New projects (44%)

The survey marks the seventh occasion on which the ANA has polled its members on the marketing industry's post-recession fiscal focus. The study was executed online in January 2013. Respondents included 120 client-side marketers.

Read the original unabridged ANA article.

All data sources are attributed with links to the original insight. The insight is then summarised and, where appropriate, enhanced with additional information.

Source: ANA.net
MTT insight URL: http://marketingtrendtracker.com/article.aspx?id=6064

CMOs to Share Opinions on Ad Agency Performance

Bottom Line: A 'club' of Chief Marketing Officers in major US companies has launched a "vendor rating program" enabling members to share 'likes' (or 'dislikes') of agencies and other marketing services suppliers.

Membership of The CMO Club - currently around seven hundred strong - is limited to US and overseas executives holding a current Chief and/or Head of Marketing position. This week the Club launched a private Vendor Rating Program that enables its membership to exchange frank opinions about the merits or otherwise of suppliers across eighteen product and service categories, ranging from ...

[Estimated timeframe: Q1 2013 onward ]

... creative and media agencies to mobile and analytics firms.

It's a move that could empty the wallets of agency evaluation consultancies. 

In some respects the new service is analagous with consumer-oriented Yelp Inc, a local directory service with social networking and user reviews. 

According to CMO Club founder and president Peter Krainik, he often witnessed chief marketers swapping recommendations informally at the club's dinners and events. "This is us helping people behind closed doors," said Krainik of the new program.

"We're connecting people, that's what the club is all about."

Since the inception of the program at the start of 2013, between five and ten CMOs per month have added recommendations. Mr. Krainik says the listings are growing, with multiple reviews for some vendors, as well as reviews for some bigger agencies.

The group last week began the program promoting the scheme with a PR push.

Evan Greene, CMO for the Grammys, says he's a "big fan" of the vendor-rating program and has both submitted reviews and used the service for recommendations.

"It's really helpful to see what people in a similar role are doing. It's an open exchange of ideas and recommendations".

But the project begs a thorny question.

Will busy marketers - who are concerned with everything from product development to distribution channels to consumer awareness, and not just their agency relationships - have time to regularly log on to submit their recommendations?

Moreover, will they actually be willing to spill the beans? Especially as most marketers view the work done by their agencies as a competitive advantage.

Reassures Krainik: "The review process is not laborious" although it certainly is thorough.

Each entry has fifteen questions, with a mix of drop-down menus and open-ended questions, in addition to basic information like reviewer name and vendor name.

CMOs can rank vendors on quality of service, on-time delivery, price and customer service. Mr. Krainik says that reviews can't be anonymous, and notes that he has personally approved each member of the club.

Read the original unabridged AdAge article.

All data sources are attributed with links to the original insight. The insight is then summarised and, where appropriate, enhanced with additional information.

Source: AdAgecom
MTT insight URL: http://marketingtrendtracker.com/article.aspx?id=6053

Takeover Frenzy Predicted for Indie Ad Agencies in 2013

Bottom Line: City pundits predict that a surge in mergers and acquisitions activity will hit advertising and marketing agencies during 2013. 

The 'Big Six' global marketing and communications groups - WPP, Publicis Groupe, Omnicom, Interpublic, Dentsu and Havas - between them bought at least 107 agencies worldwide in 2012 – a significant increase on 54 acquisitions in 2010 and 98 in 2011. According to a coalition of City of London financiers, 2013 will see ...

[Estimated timeframe: Q1 2013 onward]

... even more agency ingestions. 

The coalition, led by so-called 'corporate advisory boutique' Clarity Capital Partners [CCP], predicts a boom in mergers and acquisitions this year as the big holding groups step up their acquisition efforts, especially in digital and social media.

The biggest takeover in Britain last year was the £3.2bn purchase of Aegis by Japan's Dentsu, in addition to which there were a series of other deals, including the sale of Adam & Eve to Omnicom, BBH to Publicis and AKQA to WPP.

"We expect this level of activity to continue," says Marcus Anselm, partner at CCP, who described this trend of big groups using acquisitions as a means to grab talent as "acquahire".

Anselm cites the sale of Adam & Eve, on which he advised, as an example. Omnicom has used the agency, known for its acclaimed John Lewis ads, to inject energy into its existing subsidiary DDB, by merging the two shops to form Adam & Eve/DDB.

According to stockbroker Brewin Dolphin, more than 90% of takeovers in the advertising sector last year were for companies with a value below £30m, while roughly 70% were specialists in digital advertising.

Read the original unabridged independent.co.uk article.

All data sources are attributed with links to the original insight. The insight is then summarised and, where appropriate, enhanced with additional information.

Source: Independent.co.uk
MTT insight URL: http://marketingtrendtracker.com/article.aspx?id=6017

Marketing's Elite Adopt Facial Recognition Ad-Testing

Bottom Line: Major global clients are harnessing a new facial recognition application that enables them to more accurately assess the emotional impact of ads.

Developed by WPP Group's brands, media and communications unit Millward Brown, the facial analysis technology has been honed by a series of trials and is touted as "the largest-scale adaptation of facial coding technology in the industry" following its adoption by two of the globe's largest FMCG marketers ... 

[Estimated timeframe: Q1 2013 onward]

... Unilever and Coca-Cola, both of whom plan to harness the technique to their entire ad-testing programme during 2013.

According to the MediaPost source article, Millward Brown developed the technology in partnership with Affectiva, the developer of a facial coding technique known as Affdex.

The technique uses proprietary software to interpret how viewers feel about ads via their facial expressions - feelings that often are not communicated verbally in respondent surveys.

Graham Page, head of Millward’s neuroscience practice, believes that facial analysis “adds depth to our understanding and builds on our validated metrics to deliver new insights in an easily applied and cost-effective way.”

Millward said it has used facial analysis on over 400 advertising research projects around the world since partnering with Affectiva.

It expects to apply the technique to thousands of projects during 2013.

Read the original unabridged MediaPost article.

All data sources are attributed with links to the original insight. The insight is then summarised and, where appropriate, enhanced with additional information.

Source: MediaPost.com
MTT insight URL: http://marketingtrendtracker.com/article.aspx?id=6012

'Always Connected Consumers' Will Dictate Future of Marketing

Bottom Line: The "always connected consumer" will determine the future of the global marketing industry, according to Publicis Groupe ceo Maurice Levy.

Addressing investors at the Goldman Sachs Communcacopia conference in New York last week Publicis Groupe ceo Maurice Lévy said the future of the marketing and communications industries will be controlled by the "always connected consumer". Therefore, posited Lévy:“Brands want to be connected to consumers, so they have to be connected, too.” Mr Lévy's prediction should be taken seriously, not least because ... 

[Estimated timeframe: Q3 2012 - 2013 onward]

... he heads the world's third large advertising and communications conglomerate, trailing only the UK's WPP Group and US-headquartered Omnicom

Moreover, Mr Lévy has put his shareholders' money where his mouth is, focusing intently on building the group's digital asset base. More than one-third of Publicis's revenues are now derived from digital and its global goal is at least 50%. In the USA the company has already achieved that objective.

“We were the first [agency group] to really bet on digital,” Levy said, suggesting that those bets will pay off big-time in the future. Publicis now has 18,000 digital staffers company-wide and “some of the best experts in the world.”

No coincidence, perhaps, that just a couple of hours prior to taking the stage at the conference, Publicis confirmed it had agreed to acquire one of the last remaining major independent digital agencies, Amsterdam-based LBi, for $540 million.

Read the full unabridged article.

All data sources are attributed with links to the original insight. The insight is then summarised and, where appropriate, enhanced with additional information.

Source: MediaPost.com
MTT insight URL: http://marketingtrendtracker.com/article.aspx?id=5931

Microsoft Elbows Into Ad Shop Territory, Fans Future Furore

Bottom Line: San Francisco tech-startup hotbed, the 'South of market' neighbourhood [SoMa], will soon be home to a new marketing agency: Microsoft. It could presage war!

The Redmond colossus has unveiled plans to open Solution Studio 415, an 18,000 sq ft space in December 2012. It will not only house brand marketers but also teams of Microsoft product designers, software developers and other technologists. Their target? Brands in the retail, auto and consumer packaged-goods categories. The news is unlikely to be greeted with enthusiasm on Madison Avenue and similar adland environs. Hawking "creative solutions to business problems", Microsoft has yet to ...

[Estimated timeframe: Q3 2012 onward]

... reveal its clients [if any yet?], although the Redmond hype machine predicts that "Studio 415's focus will be on brands in the retail, auto and consumer packaged-goods categories, addressing such issues such as 'retail experience transformation' and 'omni-channel marketing'."

According to Rick Chavez, general manager of Microsoft's online-services division, who is overseeing Studio 415, Microsoft is looking "to inform what we're building with the priorities of our customers, and to give them early access to the kind of innovation that we expect to scale more broadly over time."

As a hypothetical example Chavez cites: "An automaker that wants to give customers a better experience in dealerships might work on a project with Microsoft to integrate a Kinect device in showroom vehicles, which could then use facial recognition to gauge whether they had liked the experience of sitting in the car. Or an Xbox could be put into the vehicle to let customers hear their own playlist from the driver's seat. The overriding idea is for marketer collaboration to inform the production of Microsoft's consumer-facing products."

The AdAge article comments that "For a tech company, Microsoft seems to be taking a unique approach with its clients".

To all intents and purposes, Microsoft looks to be bypassing agencies and going straight to brands. Chavez said that Microsoft has been in talks with search and display advertisers and enterprise customers about the program, which could be expanded to New York if it catches on.

Participation will be fee-based, but Microsoft declined to say what the fee would be. It's goal is to concurrently accommodate two clients in the San Francisco location that would work intensively with Microsoft teams for a year and deliver an execution every ninety days.

Meantime, rival tech titan Google has assiduously courted the agency world with its Creative Sandbox, which it describes as "a resource for agency creatives to learn about Google products such as Android and YouTube through events and publications.

Why did Microsoft choose San Francisco for Studio 415's base instead of Silicon Valley, where it has a campus in Mountain View? Mr. Chavez said the city felt like a hotbed of innovation with the presence of Twitter, Zynga and the myriad startups populating the city's South Park neighborhood.

"It's become a fun mecca for digital innovators," he said.

Fun? Microsoft? Maybe it'll rain in the Sahara tomorrow.

All data sources are attributed with links to the original insight. The insight is then summarised and, where appropriate, enhanced with additional information.

Source: AdAge.com
MTT insight URL: http://marketingtrendtracker.com/article.aspx?id=5927

Global Marketers Edge Toward Results-Based Agency Pay

Bottom Line: New methods of ad agency compensation, such as value-based remuneration, are gaining global traction albeit at a snail-like pace, with a meagre four percent of global marketers currently utilizing such models.

America's Association of National Advertisers [ANA] yesterday released the first-ever Global Agency Compensation Survey, offering new insights as to how global marketers structure and manage compensation practices with their advertising agency partners. The benchmark study, which polled marketers operating in nearly forty countries across all continents, reveals that ...

[Estimated timeframe: Q2 2012 onward]

...  marketers' agency remuneration models mirror, in many cases, existing US practices. For example:

  • Fees are the dominant method of agency compensation, globally practiced by 57% of respondents. An additional 37% of respondents utilize fees in combination with commissions.
  • Although many marketers use traditional media commissions in combination with fees, no respondents to this survey indicated that they use only traditional commissions to compensate their global agencies.
  • New methods of compensation, like value-based remuneration, have not taken hold globally. Only 4% reported utilizing them.
  • Half of respondents now employ performance-based incentives (46% percent in the US compared with 49% globally).

Important differences emerged in the survey, however:

  • Far more global marketers employ a combination of fees and commissions than in the US (37% versus 6%). According to David Beals, president/ceo of R3:JLB, who worked with the ANA and analyzed the results of the survey, two factors contributed to this finding:

    • In markets like Japan and Brazil, commissions are still the dominant compensation practice.
    • In smaller markets, where client marketing investments are less predictable, marketing spending does not easily allow for ongoing retainer-based compensation.
  • Global marketers are considerably more likely to base incentive criteria on metrics such as media delivery, brand perception, digital delivery and copy testing, and far less likely [than in the US] to employ sales metrics as a success criterion.

Comments ANA president/ceo Bob Liodice: “With this groundbreaking survey – the first-ever conducted on a global basis – the marketing community now has a vital benchmark to track worldwide approaches and innovations in how marketers compensate their agency partners.

“Global marketers will now be better able to understand how their peers are wrestling with the challenges of compensating agencies across diverse countries, cultures and conditions.”

Read the original unabridged article here.

All data sources are attributed with links to the original insight. The insight is then summarised and, where appropriate, enhanced with additional information.

Source: ANA.Net
MTT insight URL: http://marketingtrendtracker.com/article.aspx?id=5834

US Marketers to Steer Steady Future Course, Focus on RoI

Bottom Line: In a survey of major US marketers conducted by trade body, the Association of National Marketers, more than half the respondents (52%) said they will challenge their ad agencies to reduce in-house costs.

Despite the recent improvement in America's economic outlook, major marketers continue to spend conservatively as budgets remain steadfast, reveals the sixth and latest ANA Recession Survey. Observes ANA president/ceo Bob Liodice: “It’s not just marketers who are feeling the pinch. All of our partners feel the impact of this year’s projected trends, as modest spending trends undoubtedly affect business processes throughout the supply chain.” Looking forward, Liodice declared that ...

[Estimated timeframe: Q2 2012 onward]

... “Marketers need lasting solutions that focus on efficiency. We need to view this as an opportunity to push our industry to reach the next level of innovation and evolution.” 

These are the key areas of insights for this year’s Recession Survey:

Agency Compensation

  • Only 17 percent of marketers plan to reduce agency compensation, representing the most hopeful outlook for agencies since 2008.
  • However, 52 percent of those marketers surveyed will challenge their agencies to reduce costs internally, placing pressure on agencies to share the cost-effectiveness load.

Marketing / Media Budgets & Projected Spending

  • In the coming year, marketers will continue to be conscientious in their spending, even as the economy recovers.
  • Given this cautious environment, nearly half of marketers surveyed (49 percent) said that their advertising budgets will remain the same.
  • However, a third said their budgets will decrease (34 percent).
  • The remaining group of respondents (17 percent) believe their advertising budgets will increase.
  • For those companies that plan to reduce budgets, reductions are expected to be higher than last year, with 33 percent planning to reduce marketing budgets by 11 percent or more, compared to 25 percent in 2011.

Overhead Spending Insights

  • Marketers are opting for short-term budget cuts related to overhead expenditures.
  • For example, 28 percent of marketers plan to decrease investment in professional development (eg, conferences, training) and 21 percent plan to utilize more freelancers to fill open positions – both increases from 2011.

The most popular ways marketers plan to reduce costs and expenditures:

  • Restricting departmental travel and related expenses (68 percent)
  • Reducing advertising campaign media budgets (48 percent)
  • Altering the mix of marketing channels to lower cost channels (40 percent)
  • Eliminating / delaying new projects (36 percent)

Summarises Mr Liodice: “Though the industry outlook is trending toward stability, marketers need to be careful not to simply rely on short-term answers to solve enduring budget issues."

All data sources are attributed with links to the original insight. The insight is then summarised and, where appropriate, enhanced with additional information.

Source: ANA.net
MTT insight URL: http://marketingtrendtracker.com/article.aspx?id=5808

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