Commentary

GroupM Warns, 'These Are Dangerous Days For Advertisers'

GroupM is out with a useful new report on the media landscape, authored by Brian Wieser the company’s president of business intelligence, and Rob Norman former North America CEO and now an advisor to the company.

“These are dangerous days for advertisers—at least those who have used television as the foundation of their communication strategy,” the duo write in a section of the report entitled, “The Great Disruption.” “With shifts in viewing habits, commercial impressions in the most viewable, highest attention media are in free fall across the world. The problem is universal and if the viewing behavior of younger audiences is a harbinger, things are not going to get better.”

Well if those words don’t grab your attention, you must not earn your bread and butter in the media space.

They go on: “The simple truth is that Google and Facebook on the one hand and Netflix on the other have structurally undermined a century-old economic model: the former two companies by advertising-led monetizing of intent and social interaction in the absence of content, and the latter one by monetization of content in the absence of advertising.”

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I totally get it. TV channels constantly splatter viewers with a barrage of completely irrelevant advertising. It’s almost like they’re engaged in a competition to deliver the least relevant advertising they can transmit to most households. Between Netflix and other streaming services and the VCR, problem solved!

The report also provides a detailed breakout on the big media kahunas serving GroupM clients. In GroupM’s top 15 global markets (by billings) Google and Facebook represent 19% of the total.

Google is the largest supplier to GroupM clients in those top markets. Facebook is fourth. In between are The Walt Disney Company and Comcast. Somewhat surprisingly Bertelsmann is 5th. Rounding out the top 10: ITV, CBS, Viacom, Publitalia ’80 and Germany’s  SevenOne Media.

And while traditional media have lots of issues (that the report delves into) so do the likes of Google and Facebook. One particular threat looms large and it’s not the competition. Rather, it's regulation, per the report.

There’s a lot more in the report, which you can access here.

1 comment about "GroupM Warns, 'These Are Dangerous Days For Advertisers'".
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  1. Ed Papazian from Media Dynamics Inc, October 29, 2019 at 9:09 a.m.

    The basic error---in my most humble opinion---- that this  report makes is its lumping of all types of ad spending---national vs local, branding vs. direct response/search, etc. and all kinds of media together. For example, it is obvious that as "linear TV"'s time spent levels will continue to slowly decline---with much of the losses being picked up by streaming platforms----that the number of available "linear TV" advertising GRPs will decline. Unless, of course, the TV ad sellers, especially cable ones, simply increase their commercial loads. However, we are already seeing ad-supported venues in OTT developiing momentum while it is very likely that ad-supported services will multiply in the streaming arena, not only by Comcast and Quibi but to an even greter extent if and when Netflix is forced to go the same route. Also, once they are able to attain critical scale---both in coverage and available GRPS----so-called "advanced TV" sellers will offer those advertisers willing to pay the price of much higher CPMs better targeting capabilities---providing that these systems are reconfigured to refelct viewing,  not set usage, metrics and more advertisers free their brands from their corporate buying dictates. So why should TV advertisers be dreading these developments?

    As regards the barrage of supposedly irrelevant  commercials that TV throws at the public, the truth is that most commercials seek out their own audiences from those watching the shows the ads appear in. No sane advertiser believes that everyone pays attention to every commercial in every break. Those who do pay real attention---perhaps 25-30% of the audience on average--do so because they like the ad's style---use of visual effects, humor, celebrities, etc. as hooks or because they are current brand users and the ads reinforce their convictions or because they are interested in changing brands or sampling new ones. By way of contrast, consider the barrage of annoying and redundant ads a digital media user is hit with, especially as he/she is tracked after buying a product or visiting a website selling  or about same.

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