50 Marketing Trends found for Agencies / Holding companies


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WPP's Sorrell Warns of 'Lost Decade'

Bottom Line: WPP Group ceo Martin Sorrell warns that the global economy may be only half way through "a lost decade".


Sir Martin Sorrell has warned analysts and WPP Group investors that despite healthy 2012 pre-tax profits of £1bn-plus, the world's largest marketing services company "got there ugly". He also believes that the world economy may be at the half-way point of "a lost decade". Despite his caution, however, seasoned Sorrell-watchers have learned over the years that the canny mogul is adept at ...

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... promising small and delivering big.

If Sir Martin remains true to form, his gloomy prognostications for the world economy will show WPP triumphing over adversity despite unpropitious global economic conditions between now and 2020.

Sorrell warned that 2013 will be another demanding year, with slow or stagnant growth in western continental Europe (excluding the UK) likely to continue for some time. He added: "We may well only be half way through a lost decade, post-Lehman."

Given that half a decade has already elapsed since Lehman's collapse in 2008, Sir Martin's forecast of a "lost decade" veers toward the obvious.

On a more pragmatic note, the WPP supremo sees the USA's budget deficit as the "elephant in the room" and last-minute attempts in the US Congress to deal with the problem on New Year's Eve "only succeeded in kicking the can further down the road".

Never averse to florid similes, Sorrell also considers the US deficit as the most threatening of his five so-called "grey swans".

In plain English the reference relates to the "known unknowns" affecting the global economic outlook (the converse of "black swans", which take the market by surprise).

Sir Martin's grey swans also include the Eurozone crisis, turmoil in the Middle East and a slowdown in fast-growing economies such as China, Brazil and India.

He is also unhappy at Prime Minister David Cameron's decision to stage a referendum on the UK's membership of the European Union, which Sorrell sees as adding "further uncertainty" to the UK economy.

Read the original unabridged Guardian article.

[Estimated timeframe: Q1 2013 - 2020]

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

Source: Guardian.co.uk
MTT insight URL: http://marketingtrendtracker.com/article.aspx?id=6044

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 ...

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... 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.

[Estimated timeframe: Q1 2013 onward]

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

Will Ad Groups Take it on the Chin from China's Slowdown?

Bottom Line:  The World Bank today predicted a prolonged slowdown in the Chinese economy which, if correct, could severely impact the Asian profits gravy-train enjoyed by the 'Big Five' agency holding companies - WPP, Omnicom, Interpublic, Havas and Publicis.


At a World Bank briefing in Singapore today the bank's chief economist for the region, Bert Hofman, warned that the slowdown in China could worsen and extend beyond earlier forecasts. "Unlike the rest of the Asia Pacific region, China is experiencing a double whammy – a growth slowdown driven by weaker exports as well as domestic demand, in particular investment growth." Despite cutting the bank's economic growth forecasts for the region, Mr Hofman stressed that ...

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... the World Bank nonetheless expects China to enjoy a soft landing - an opinion underscored by the bank's revised 7.7% growth forecast for this year and 8.1% for 2013.

Along with the USA, China is the world's major economic growth engine. Hence the presence in the communist nation of all five global ad agency holding groups - WPP, Omnicom, Interpublic, Havas and Publicis.

WPP ceo Sir Martin Sorrell has stressed long and loud the importance of the Chinese and Asia Pacific markets and - more to the point - put his shareholders' money where his mouth is, with WPP outposts in Hong Kong, India, Shanghai, Singapore and South Korea.

According to the World Bank's Data Monitor, ambitious investment plans announced by several regional governments in China could face funding constraints, "not least because governments are feeling the pinch of a cooling real estate market, which lowers land sales revenues".

The Bank also believes that [China's] central government is unlikely to introduce a major fiscal stimulus package, given that policymakers are concerned about a rebound in home prices and a possible reversal of hot money flows.

But the bank expects growth in China to pick up in 2013, helped by monetary policy measures introduced earlier this year and an acceleration of central government investment spending.

Read the orginal unabridged article.

[Estimated timeframe: Q4 2012 onward]

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

Source: Guardian.co.uk
MTT insight URL: http://marketingtrendtracker.com/article.aspx?id=5942

'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 ... 

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... 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.

[Estimated timeframe: Q3 2012 - 2013 onward]

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

Agency Holding Groups Face Glum Prospects, New Rivals Thru' 2013

Bottom Line: In a report released today on this year's Q2 performance of the five global agency holding companies, an influential US equity research firm predicts the world's ad economy will get worse before it gets better.


Expanding on his pessimistic bottom-line assessment of the global adland economy, Pivotal Research Group's Senior Analyst Brian Wieser explains: “Over the summer, we have become incrementally pessimistic about conditions for the economy, advertising and agency services. We are now moderating expectations through to the end of 2012, and for the first part of 2013 to reflect a tougher environment for advertising." He adds, however, that ... 

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... "things should start to improve late next year, with expectations that the economy will be improving by then."

Pivotal, which focuses its research on the media and communications sector, including cable and satellite markets, explains the rationale for its gloomy outlook.

Part of the reason for this near-term pessimism is that second-quarter results were fairly sluggish for the major holding companies.

Globally, the big five - WPP, Omnicom, Publicis, Interpublic and Havas - grew organically by a meagre 3.1%, down from the 4.2% that the companies averaged in both the prior quarter and the fourth quarter of 2011.

Excluding political and Olympic dollars, second-quarter performance was worse: just 1.3% organic growth combined for the five companies.

Wieser downgraded his second-half organic-growth projections for both Interpublic and Omnicom, noting that revenues “decelerated more rapidly,” in North America, where both do most of their business.

Ongoing risks for the agency world, Wieser said, include a continual effort by clients to squeeze service providers on fees. “Marketers are typically squeezing their agencies for operational efficiencies on an ongoing basis,” he opined.

Ad agencies will also face new competition from adjacent industries, such as IT services firms like IBM and Adobe, which are providing enhanced data analytics capabilities directly to marketers.

Notes Wieser: "This type of competition is likely to increase in the future. Search engine marketing is another field where competition is increasing outside the agency space."

[Estimated timeframe: Q3 2012 - 2013]

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=5921

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 ...

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...  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.

[Estimated timeframe: Q2 2012 onward]

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

Shopper Marketing is Dead - Long Live Shopper Marketing!

Bottom Line: Tougher economic conditions and increasing consumer savvyness in Europe and the USA is refocusing the attentions of consumer goods marketers on the sharp end of the business - the instore environment. TV and online-besotted ad agencies have been slow to grasp this unfashionable concept, although WPP Group has at last seen the light!


WPP Group this week launched a new shopper marketing venture dubbed The Shopper Marketing Store [uncomfortably close in nomenclature to long establshed transatlantic agency The Marketing Store]. WPP claims its new baby, sited in London and Chicago, will make it easier for clients to harness the group-wide tools, specialists and agencies devoted to the discipline worldwide. The new venture has joint chief executive officers, respectively based in ...

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... London and the Windy City. In the latter Gwen Morrison will oversee the Americas, Australia, New Zealand and neighboring Pacific islands, while in London David Roth is responsible for business in Europe, the Middle East, Africa and Asia.

Not a new discipline, shopper marketing reached its apogee back in the 1960s-70, since when it gradually coasted downhill. Today's tough econoimic climate, however, has give the practice a new leaf of life.

Shopper marketing encompasses a wide variety of different capabilities and consumer touchpoints, including shopper research and insights, store design, customer relationship management, instore communications, packaging and e-commerce.

As client demand has grown, agencies are paying more attention to retail and shopper marketing disciplines. A recent study by America's Grocery Manufacturers Association estimates that shopper marketing across the retail sector is now a $50 billion to $60 billion category, up from an estimated $35 billion in 2009.

The new WPP service brings together the resources of fifteen of its agencies worldwide, each a specialist in the sector and accessible via a single dedicated website fronted by no lesser personage than Sir Martin Sorrell himself. The service also offers an online dashboard that clients can use to create customized solutions tailored to their own specific needs. 

Among the plethora of WPP companies collaborating in the new venture are The Brand Union, Fitch, The Futures Company, G2, JWT Retail, Kantar Retail, Landor, Lunchbox, OgilvyAction, Rockfish, Shopper2Buyer, The Smollan Group, TNS, Wunderman and Y&R Retail.

[Estimated timeframe: Q1 2012 Onward]

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=5763

"Global Macro Concerns" to Hit Agency Conglomerates' Profit and Growth in 2012

Bottom Line: Citing "global macro concerns", Zurich-based global bank UBS predicts a lean time in 2012 for the main multinational agency conglomerates, in particular Omnicom and Interpublic.


The current decline in adspend growth stateside will particularly hit the nation's two largest agency holding companies - Interpublic and Omnicom - predicts UBS in its latest industry spending estimates. The bank foresees a drop in 2012 US adspend growth from its previous guesstimate of 4% to 3.6% - a fall of nine percentage points. UBS is not alone in its gloomy view of the US enconomy ...  

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... with a similarly downbeat forecast peddled earlier this month by Barclays.

The banks' gloom is partially triggered by Kantar Media's recent estimate that US spending growth slowed from the first quarter to the second quarter. Second-quarter spending was up just 2.8% compared to the same period in 2010. By comparison, year-to-year growth in the first quarter was up 4.4%.

When Kantar released its second-quarter ad spending figures on Sept. 12, svp for research Jon Swallen opined that decelerating growth raised questions "about the durability of an advertising recovery that is into its second year."

"Key indicators are painting a mixed picture," according to Swallen. "On one hand, a majority of media categories actually improved their performance from Q1 to Q2. On the other, spending growth for the top 100 advertisers stalled in Q2, and the ad market became more dependent on the comparatively smaller budgets of mid-sized advertisers as the main source of growth."

UBS said it has reduced Interpublic's organic growth estimate from 5% to 3.6% for next year, lowering the holding company's estimated profit (before interest and taxes) to $725 million from $758 million. That equates to a profit margin drop of three-tenths of a percent to 10%.

For Omnicom, UBS is reducing its 2012 organic growth estimate from 5% to 4.3%. The bank is also slashing $40 million from its estimated 2012 pre-tax and-interest profit estimate to $1.84 billion -- a move that will lower the company's margin by two-tenths of a point to 12.6%, according to the bank.

Neither agency group was prepared to comment on the UBS report.

[Estimated timeframe: Q4 2011 - 2012]

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=5668

WPP Exports US Back-Office Agency Jobs to India ... Who's Next?

Bottom Line: Over one hundred finance-related jobs will be outsourced from WPP Group's US agencies to a specialist Indian offshore center before the year end. Some ask if this is the trickle that precedes the flood?


Despite posting its highest ever pre-tax profit in 2010 -- a 27% year-on-year increase to over £1 billion -- the world's largest marketing services conglomerate plans to slash its back-office costs stateside by exporting "more than one hundred" non-client facing jobs from its US agencies to India. WPP Group claims the decision to oursource US jobs was not mandated from the top, although WPP-watchers think it unlikely the move lacks the blessing of global ceo Sir Martin Sorrell.  Among the shops immediately affected are ...   

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... Ogilvy & Mather, JWT, Grey, Y&R and Wunderman.

The partyline, according to a WPP spokesman is that the agencies "have decided to seek greater efficiencies in their companies and presently plan to have 'non-client' facing services delivered from an offshore specialist center in India.

In most cases, the positions affected are in New York, but finance department staff in other North American offices may also be impacted. WPP's partyline: "The total number of jobs under consideration represent less than one percent of overall staff (including associates) and the job transfer will happen over the coming months."

Toeing that line at Ogilvy & Mather -- which will bear the brunt of the cuts -- was O&M Worldwide chief marketing officer Eleanor Mascheroni who claims: "This action will reduce overhead costs while maintaining the quality and level of support we provide to our clients and partners.

"We have entered into an agreement with a top-tier business-process outsourcing services provider specializing in this kind of service delivery at lower costs to handle the processes. Many of our clients have been working with this model for many years."

Ms Mascheroni, however, curiously failed to mention that the jobs will go to outsourcing giant Genpact which -- by one of those odd coincidences -- also happens to be a major client of Ogilvy Public Relations Worldwide.

Genpact is an offshoot of GE Capital and is listed on the New York Stock Exchange. It operates in seventeen countries and supports over twenty-five languages.

Which begs the question as to when the New York cull will be extended to other WPP locations?

[Estimated timeframe: Q3 2011 onward]

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=5640

Is Cannes Now a Corporate Davos, Manipulating Marketing's Future?

Bottom Line: The Cannes Lions gongfest has metamorphosed from a ritzy adland talkshop to a Davos-style exclusive club where the mighty of media, finance and marketing mingle behind closed doors to fashion the future of media and marketing.


Once upon a time the Cannes Lions was just another glitzy industry gabfest where agency creatives celebrated their awards over champagne and Vodka Red Bulls. But in the recession-ridden climate of 2011 the adland event on the Côte d'Azur has transmogrified into a cabal where the world's largest agency holding companies (WPP Group, Omnicom, IPGPublicis et al) discuss bottom line issues with media molochs like Google and Facebook, alongside marketing shot-callers Procter & Gamble, Unilever, WalMart and VW - plus a rat-pack of investment analysts and fiscal titans like Berkshire Hathaway. Croons Facebook's starry-eyed vp of global marketing Carolyn Everson ... 

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... "What is happening here is we are redefining the way all of us work together. We love the notion of partnering with entertainment and content providers and have them think about how to make content social from the start."

Ogilvy & Mather ceo Miles Young was thankfully more down-to-earth: "We used to be agents. Then we weren't sure what we were, as people were terrified by the digital disruption. Now, I believe we are publishers."

Mr Young was referring, of course, to the way in which tech firms, entertainment companies, designers, copy writers and ad executives now work together to find new ways of capturing consumers' fickle attention.

Despite the current explosive political situation in the Middle East and accelerating fears of a double-dip global recession, ad markets are booming again.

Says Andy Fennell, cmo at alcohol giant Diageo: "In the old days [circa 2008-09], we tried to squeeze [advertising] costs as much as we could. Now we are considerably increasing spending on content, particularly in the last year."

But what has driven advertiser's demand for higher quality content. According to Fennell: "People have a lower attention span."

And finally folks ... for afficionados of C-Suite sagacity, Time Warner chairman/ceo Jeff Bewkes offered this pearl of wisdom to the elite of of global media and marketing: "Advertisers have got to make cleverer ads, you have to learn from the creative industry."

[Estimated timeframe: Q3 2011-onward]

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

Source: WSJ.com
MTT insight URL: http://marketingtrendtracker.com/article.aspx?id=5611



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