PALM SPRINGS, Calif. – Advertising agencies have undergone major changes in the past decade amid technological advancements and shifts in consumer behaviors. Within agencies, media buying has been one of the best opportunities for growth as marketers mine consumer data to better understand the best ways to reach new and existing customers.
“The agency industry itself is actually holding up reasonably well and probably a lot better than a lot of people would have thought,” Brian Wieser, founder and principal of consulting firm Madison and Wall, said in this interview with Beet.TV at IAB’s Annual Leadership Meeting. “It’s a low-single-digit growth business is maybe the best way to characterize it.”
The major agency holding companies – Publicis Groupe, Dentsu, Omnicom Group, Interpublic Group and WPP – vary by financial performance within a mature marketplace whose growth is sensitive to economic cycles. Services such as media planning and buying, ad creative, digital marketing, content creation, branding, market research, public relations, influencer marketing, analytics and reporting, experiential marketing and strategic consulting also have different growth rates.
“The best opportunities right now for agencies are firstly media. At least the incumbent holding companies are doing incredibly well,” Wieser said. “All these numbers are really in organic terms, and so, we do see a mid- or high-single-digit growth rate for media agency businesses.”
Information technology services focused on marketing also should be grouped into the media universe, he said, pointing to Globant as an example of a company whose yearly growth is a double-digit percentage.
Dynamic programmatic market
The automated buying and selling of advertising, or what is known as programmatic, has grown as more of the media marketplace becomes digitized. Digital media includes television amid the massive shift away from traditional linear broadcast and cable distribution to internet-connected smart devices.
Tech giant Google and adtech pioneer The Trade Desk are the two dominant companies in the programmatic space, but Wieser said he sees room for competition, especially on the sell side that represents publishers and content creators.
“There’s still plenty of opportunity for companies that are participating in this space if they’re primarily servicing publishers or sellers of advertising,” Wieser said. “The real goal has to be to super-serve the technology needs of those publishers.”
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