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GroupM

STUDY: Social Media Advertising Doesn’t Work So Well

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Yesterday, we brought you the story of a well-off British gent discussing how WPP’s GroupM will double its Twitter advertising budget to $100 million for 2014.

Today in what may seem like an attempt to show him up, Gallup released its latest study into the wild. It tells the world something the rest of us have known for years: Social media advertising is as good as flushing $100 bills down the toilet.

Here’s why those Benjamins are swirling down the drain.

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Ad Spending Surpasses Pre-Recession Numbers of $109B

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When the recession hit America with a huge thud, big business began to reconsider its residual income and closed up the budgets. Of course this hurt advertising agencies in a big way and many experts thought they would never recover, but this article from AdAge seems to contradict the naysayers once and for all.

Total spending among the 100 Leading National Advertisers (LNA) reached a record $108.6 billion in 2013, passing the previous spending peak set in pre-recession 2007.

Quick, call your clients…

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WPP’s Maxus Appoints New North American CEO

Steve WPPThis morning in news that has nothing to do with the Omnicom/Publicis collapse, WPP/GroupM media agency Maxus poached a top executive from Omnicom’s PHD.

Steve Williams, who spent two years as president at PHD, will be Maxus’ new North American CEO starting June 1, replacing the retiring Louis Jones; Williams will report to global CEO Vikram Sakhuja as well as GroupM’s North American chief Kelly Clark.

In the new role, Williams will work with the New York, L.A., Chicago, Minneapolis and Toronto offices of what the press release and RECMA call “the fastest growing global media agency for the past four years.”

Before joining PHD, Williams served as CEO of the UK’s OMD Group.

No word on how much pleasure Martin Sorrell took in making this announcement.

Rob Norman to Chief Exec at GroupM North America

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WPP announced that current GroupM Interaction chief exec Rob Norman will take on the added role of chief exec at GroupM North America. According to Brand Republic, Norman will relieve the retiring Marc Goldstein of his North American duties on March 31. Once he assumes his new post, Norman will share management duties with Group M’s chief investment officer Rino Scanzoni.

Norman’s notable achievements within WPP’s media buying unit include creating the new media division at CIA in 1994, serving as chairman of Mediaedge:cia UK in 2003, building out the worldwide MEC offering a year later and eventually taking on the worldwide CEO post at GroupM Interaction in 2006.

More: “GroupM Buddies Up with Yahoo!

GroupM Buddies Up with Yahoo!

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WPP’s GroupM, which includes MediaCom, Mediaedge:cia and MindShare in its enclave, has inked a branded content deal with Yahoo! which is aimed at helping marketers creatively incorporate their brands into original online programming.

According to CNET, Yahoo! is trying to build out its Media group and ramp up original online content. Potential concepts in the pipeline include a reality show styled like the flick Almost Famous called Rock ‘n Roll Jet Plane and a Dirty Jobs-inspired series about unemployed job seekers called 50 Jobs.

Together, the two companies will strive to identify advertisers, develop creative concepts that map media content with an advertiser’s messaging and produce the content for each program. The release states that Yahoo will also promote these branded programs to targeted audiences in channels across its network.

More: “The New Yahoo! is All About You Not in Front of Your Computer

Post Death Knell: John Durham, Sarah Fay, Irwin Gottlieb Face Off Against The Clients

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Everyone is nervous about what effect the economy will have on the biz. Recently, a bunch of media chiefs and brand leaders have made predictions at Advertising Week. Here’s the run down.

John Durham, formerly head of business development for Carat North America and co-founder of Catalyst:SF, said:

“I think smart marketers realize that now is the time they can get good inventory without having to spend Super Bowl amounts of money. That’s what makes our business fun. I’m not going to say that it’s going to be really great right now, but digital advertising works.”

Sarah Fay, CEO of Carat, has said elsewhere that:

“I would say the pressure we are facing comes from what our clients are facing. Clients need to achieve more for less budget, and it’s not necessarily because their budgets are going down, but because marketing activities are fragmenting. And the market is delivering less for more. We’re seeing escalating CPMs and diminishing GRPs in all of the usual places.”

Marc Goldstein, president and CEO of media agency conglomerate GroupM North America, says his crystal ball predicts:

“-that many companies would not cut back on advertising in 2009, despite the troubled economic conditions.”

Irwin Gottlieb said at Advertising Week that:

“consumer confidence is better than one might expect given the downturn in the economy and rising fuel prices. One explanation may be that “the consumer can’t comprehend what has happened” on Wall Street, he said. “Time will tell.”"

That’s right, Irwin. Everyone is just too stupid to realize that the economy is in the shit. Yeah. Meanwhile, CMOs of consumer brands are not as upbeat as the media guys.

Wenda Harris Millard, co-CEO of Martha Stewart Living Omnimedia and Cheryl Sandberg, COO, Facebook, are predicting harder times for consumers and brands on their own Advertising Week panel.

Shall we make bets? Two to one that the client side kids have it right. It’s going to be a rougher road the media agencies are publicly pushing, but you know those guys got together and were like, “What’s the party line gonna be?”

More: The King Of Advertising: Irwin Gotlieb

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The Oglivy, GroupM Entertainment Mash-Up

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Irwin, big balls, Gottlieb said at the 4A’s Conference yesterday that:
<blockquote."In order to achieve any kind of success, we — meaning media agencies and creative agencies — are going to have to cooperate and collaborate in a very different way than we have in the past."

Well, here is the future. It’s knocking down your door. Today, Ogilvy North America and GroupM Entertainment announced a venture that is 100% collaboration create and distribute brand-funded entertainment content on behalf of shared clients. Doug Scott, President of OgilvyEntertainment will work with representatives from both GroupM Entertainment and Ogilvy operating units who are focused on brand-funded entertainment content.

Shh…. Rumors From The 4A Leadership Conference

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1. Nancy Hill, the new head honcho over at the 4As, said that tomorrow morning she will announce new initiatives aimed at recruiting and retaining minorities into the ad business.

Um, does that mean that she has single handedly solved institutionalized racism? The lady is genius, I tell you. Nah, no. I’m actually excited to see if she cook up a plan that is going to make a difference. A real one.
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2. The other drop at the 4As conference today was that Ogilvy will soon announce a new collaboration between Group M and Ogilvy in branded entertainment.

Group M so needs to be watched considering that Irwin Gottlieb is just running that shit like Meyer Lansky (pictured above); running media buying, sorry… trading like its the goddamn Commission.
It’s almost sexy the way Group M and the agency’s who chase after them are forcing media buying to play a new game. General market agencies would do well to learn some moves, catch a little heat by learning from these “trading agencies” how to push innovation, while telling clients exactly how it’s gonna be.

Big, Bigger, Best – The Changes At GroupM

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John Montgomery, who has been serving as the worldwide CEO of GroupM’s MindShare Interaction since 2005, was named chief operating officer of GroupM Interaction North America. CEO to COO. This is a new position for the agency. According to MediaWeek:

“In his previous post, Montgomery managed the company’s global growth and oversaw expansion into emerging technologies including mobile, viral marketing and interactive television. He was also U.S. CEO of mOne, a joint venture between MindShare Worldwide and OgilvyOne Worldwide.”

“Montgomery’s new responsibilities will include oversight of strategic and operations activities at each of the unit’s interactive networks. Specifically, he will oversee all North American GroupM operations for display, mobile and data management while working with the digital units of GroupM media operating companies Maxus, MediaCom, Mediaedge:cia, and MindShare to develop and implement best practices company wide.”

GroupM recently annouced they would be plans to consolidate and restructure its global search marketing operations. The company has mashed together four units – Outrider, Catalyst, 24/7 Search and Quisma- as they plan on getting serious about search and SEO. As well, 24/7 Real Media’s proprietary bid management technology will also come under the fold. Big, bigger, best. That’s the GroupM, Irwin Gottlieb, way no?

Big Balls: Irwin Gotlieb Does Not Give A Fuck

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What’s going on with Irwin Gotlieb these days? The man, or should we say, “The King Of Advertising”, is all over the press lately. Just two week after his splashy CNN Money piece, The King has made it big in Business Week with an article titled, “An Ad Man Tests His Limits.” However, these inches are not so flattering. Drop the King moniker. Gotlieb is described as a “media buyer,” which he hates. The piece goes on to talk about Irwin’s new money making scheme, the practice known in the industry as a rebate or “volume override.” It’s a money making model that has been banned in France since 1993 and is now under scrutiny in Germany. Here’s how it works:

“A media-buying agency approaches a TV network or magazine publisher and offers to buy a large number of ads. In exchange, the network or publisher pays the media buyer a percentage of the total advertising tab. The media company may write a check, give away free ad spots, or agree to buy something from the agency—a research study, say. Sometimes media buyers share the proceeds with clients. Sometimes they don’t.

The rebates are controversial because they present a potential conflict of interest: Media buyers could be tempted to place ads not where they make sense for a client but where the rebates are the fattest.”

Irwin shrugs this all off and is planning to move forward beginning with Kinetic, GroupM’s outdoor ad buying unit. Gotlieb and Kinetic CEO Steve Ridley have already starting offering their clients this new business model. In exchange for a large purchase, Kinetic will sell the outdoor companies “tools and services” designed to help them prove their marketing efficacy to advertisers.

He told Business Week that once he enough deals under his belt, he’ll then tell clients how the rebates work (balls!) and refers to the payments as an “intelligent application of scale” and says “they represent a minor part of a plan to derive new sources of income in an increasingly competitive world.”

Everyone better mob up, like right now. Irwin is a Don of Madison Avenue. GroupM earned just over $400 million in revenues. He is not a man who takes the word “no” lightly. And catch his end piece to this article:

“In five to seven years, he predicts, he may not represent advertisers at all. He will be an arbitrageur, buying ads in bulk, slicing them up for niche audiences, and reselling them at a premium. “Then,” says Gotlieb, “we don’t have to be transparent.”

We’re speechless. The man has some big fricking nuts. He’s out, in major media, talking about his new scam with full confidence that everyone is going to fall in line. Dammnit! They probably will.

What do you guys think about this?

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