Home Agencies Q1 Roundup: Digital Media Strength Propels Agencies
Agencies

Q1 Roundup: Digital Media Strength Propels Agencies

By

SHARE:

wpp-mediaWith the Omnicom-Publicis merger now in some doubt, WPP Group retains a glimmer of hope that it could remain the world’s largest agency holding company past the third quarter.

In its Q1 earnings report Friday, WPP listed media investment – represented by its GroupM network and the Xaxis ad tech unit – as among its strongest performing sectors. Read the earnings release.

Growth in media services – particularly digital and data-driven media – was also evident in upbeat Q1 reports from WPP rivals Interpublic Group (IPG), Omnicom Group and MDC Partners.

Meanwhile Publicis’ ZenithOptimedia and IPG’s Magna Global have upwardly revised their global media investment forecasts for 2014. This momentum runs contrary to the narrative that media agencies are under threat of disintermediation as ad-buying automation takes hold. Or, if that trend is real, it has yet to inflict real pain.

WPP’s media investment businesses grew 10% as measured by gross margin and net sales, and GroupM generated new media billings of $586 million (£366 million) during the quarter across Xaxis, Mindshare, MEC, MediaCom, GroupM Search and other agencies. Much of that was likely in digital media, contributing to the $10 billion GroupM already invests across addressable channels.

WPP does not break out programmatic spend, but the company has given its Xaxis “programmatic platform” plenty of room to run, suggesting it likes the revenue growth and margins it generates. Xaxis has made a string of acquisitions in recent months and absorbed its internal sibling 24/7 Media. The result has been a more robust publisher offering, priming Xaxis to do more exclusive supply deals that Global CEO Brian Lesser believes distinguish it from its trading desk rivals.

(As an aside: Even within digital, WPP’s mix is changing dramatically. In 2013, GroupM spent more with Yahoo than Facebook, GroupM Chief Digital Officer Rob Norman told an audience at AdExchanger’s Programmatic I/O conference last month. With Facebook’s stunning ad revenue growth – 82% in Q1 – it’s unlikely that pattern would repeat in 2014.)

Speaking of rivals, Omnicom Group, IPG and MDC Partners have also reported Q1 strength in digital media investment, driven in part by data-augmented buying.

For Omnicom Group, Q1 brought an uptick in programmatic interest from branding advertising clients – a fairly new trend that appears to be gaining steam. “Within the brand advertising category, we had very strong overall growth in media, including high double-digit increases in search and programmatic buying.”

Must Read

Attention Economy

Early Adopters Are Snapping Up Attention-Based Inventory Before Everyone Else Drives Up The Costs

Current ad pricing often doesn’t correlate to a site’s attention score, which means there’s an arbitrage opportunity for buyers and resellers.

CTV

Viant Acquires Data Biz IRIS.TV To Expand Its Programmatic CTV Reach

IRIS.TV will remain an independent company, and Viant will push for CTV platforms to adopt its IRIS ID to provide contextual signals beyond what streamers typically share about their ad inventory.

Online Advertising

Integral Ad Science Goes Big On Social Media As Retail Ad Spend Softens In Q3

Integral Ad Science shares dropped more than 10% on Wednesday, after the company reported lackluster revenue growth and softened its guidance for the Q4 season.

Privacy! Commerce! Connected TV! Read all about it. Subscribe to AdExchanger Newsletters
Comic: Gen AI Pumpkin Carving Contest
generative AI

Meet Evertune, A Gen-AI Analytics Startup Founded By Trade Desk Vets

Meet Evertune AI, a startup that helps advertisers understand how their brands and products appear in generative AI search responses.

Platforms

Private Equity Firm Buys Alliant As The Centerpiece To Its Platform Dreams

The deal is a “platform investment,” in which Inverness Graham sees Alliant as a foundation to build on, potentially through further acquisitions.

Gaming

Even Sony Needed Guidance For Its First In-Game Ad Campaign

In-game advertising is uncharted territory even for brands like Sony Electronics that consumers associate with gaming.

Popular

  1. CTV Roundup

    Nielsen Says You Shouldn’t Count Out The Old Guard Just Yet

    Change is hard for a company like Nielsen, which has been around so long it even predates the first publicly available television sets.

  2. Attention Economy

    Early Adopters Are Snapping Up Attention-Based Inventory Before Everyone Else Drives Up The Costs

    Current ad pricing often doesn’t correlate to a site’s attention score, which means there’s an arbitrage opportunity for buyers and resellers.

  3. Comic: A Stain You Can’t Wash Out
    Data Privacy Roundup

    The FTC Thinks Data Clean Rooms May Have A Few Dusty Corners

    The Federal Trade Commission is warning companies that using a data clean room isn’t some kind of get-out-of-compliance-free card.

  4. Podcast

    Political Advertising Post-Mortem Analysis, Part Deux

    Jessica Alter, co-founder of the nonprofit Tech for Campaigns, believes political campaigns should model their digital ad strategy on that of seed-stage startups. She joins the podcast this week to talk through this year’s unexpected election results.

  5. Wendy Clark, president & partner, The Consello Group
    PODCAST: AdExchanger Talks

    Wendy Clark Says, ‘Do Your Homework’

    Former Dentsu CEO Wendy Clark, current president of consulting group Consello, sees the renewed controversy around principal-based buying as a symptom of a more fundamental issue: the lack of open dialogue between brands and their agencies.