This is what happens when 99% of the inefficiencies are cut out of a system (advertising industry)

Update: Including Q3 09 numbers

Source: http://adage.com/agencynews/article?article_id=140125

While no holding company’s results are pretty these days, Interpublic Group of Cos. last week posted particularly poor numbers, swinging to a net loss of over $35 million for the first nine months of 2009 from almost $60 million in profit during the same period in 2008. IPG’s third-quarter revenue fell 18% compared to declines of 14.4% at rival Omnicom Group, 8.7% at WPP (factoring out the effect of acquisitions and currency shifts) and 5.3% at Publicis Groupe. WPP’s reported revenue, including revenue from its big Taylor Nelson Sofres acquisition, rose 16.7%. In the same quarter, net income attributable to IPG tumbled 47.3%, more than double the drop of Omnicom (down 22.5%).

Google changed the game by changing the business model from paying for impressions to paying only when the advertiser gets the click. This helped to cut out the 99% of waste and inefficiency which existed in the industry.

WPP Profit Dropped 47% in Second Quarter More Than Half of Company’s Revenue Came From Nontraditional Advertising

NEW YORK (AdAge.com) — Using words such as “severe” and “surprise” to describe the recession’s impact on its business, WPP, the world’s largest advertising conglomerate, today said its profit was down 47% for the second quarter. And WPP Chief Executive Martin Sorrell said it will be a while before marketing executives begin to spend and take chances the way they did just a few years back.

FULL ARTICLE – Source: http://adage.com/article?article_id=138673

______________________________________________________________________

In a first half earnings statement released this morning, WPP Group announced that digital and direct marketing-related services now comprise 25% of its body.

WPP Group owns labels like 24/7 Real Media, Mediaedge:cia, MediaCom, Mindshare, GroupM and Outrider.

Digital and direct garnered $1.7 billion in revenues in the first half of ‘09, with a projected annual run rate of nearly $3.5 billion total. But it is digital media and advertising that appear to be dominating the segment.

Overall, first half revenues fell 2.9% to $6.4 billion in the first half on a reported basis, MediaPost reports. Like-for-like, however, total revenues slid 8.3% against the first half of 2008.

According to WPP, traditional advertising and “media investment management” have been the hardest-hit amidst the economic downturn.

“On a constant currency basis, advertising and media investment management revenues fell by 7.5%, with like-for-like revenues down 7.8%,” it stated.

Branding and identity, healthcare and specialist communications — which includes direct, internet and interactive — were least affected.

The media conglomerate committed to prioritizing the growth of digital communications, customer insights and strong geographic markets.

Related topics: Online Advertisers, Data Updates,

Source: http://www.marketingcharts.com/updates/digitaldirect-marketing-now-25-of-wpp-group-10211/?utm_campaign=rssfeed&utm_source=mc&utm_medium=textlink

Tags: 24 7 real media, acquisition, adage, advertiser, advertising, amidst, article, article article, article id, article source, basis, body, Branding, business, Came, chief executive martin, Chief Executive Martin Sorrell, cia, com, company, conglomerate, Cos, currency, currency basis, custome, customer insights, digital, digital communications, direct marketing, downturn, drop, Dropped, economic downturn, effect, factoring, first nine months, Full, game, google, Group, Groupe, groupe wpp, GroupM, half, identity, impact, Including, income, industry, industry source, inefficiency, Interpublic, interpublic group, interpublic group of cos, investment, investment management, IPG, Like-for-like, LOSS, management, marketing, martin sorrell, Media, media conglomerate, media investment, MediaCom, Mediaedge, MediaPost, Mindshare, model, morning, Nelson Sofres, New York, Nontraditional, Omnicom, omnicom group, Outrider, period, poor numbers, profit, Publicis, publicis groupe, Quarter, QuarterMore, quot, rate, Real, recession, revenue, revenue came from, run, Second, second quarter, segment, specialist communications, statement, surprise, Taylor, taylor nelson sofres, textlink, Than Half, tmoPost, today, traditional advertising, update, waste, way, Week, while, World, WPP, wpp group

By: Dr. Augustine Fou Thursday, August 27th, 2009 digital

1 Comment to This is what happens when 99% of the inefficiencies are cut out of a system (advertising industry)

Tweets that mention This is what happens when 99% of the inefficiencies are cut out of a system (advertising industry) » go-Digital Blog on Digital Marketing -- Topsy.com says:

November 4, 2009 at 9:13 am

[…] This post was mentioned on Twitter by Jonathan Mendez and Trae Clevenger, Augustine Fou. Augustine Fou said: Q3 revenue (net income) IPG -18% (-47%), Omnicom -14% (-23%), WPP -9% (not rept) — ad industry is changing – http://bit.ly/mBPbz […]

Dr. Augustine Fou is Digital Consigliere to marketing executives, advising them on digital strategy and Unified Marketing(tm). Dr Fou has over 17 years of in-the-trenches, hands-on experience, which enables him to provide objective, in-depth assessments of their current marketing programs and recommendations for improving business impact and ROI using digital insights.

http://twitter.com/acfou
Send Tips: tips@go-digital.net
Digital Strategy Consulting
Dr. Augustine Fou LinkedIn Bio
Digital Marketing Slideshares
The Grand Unified Theory of Marketing

Mike Moran
Mark Schaefer
Rob Petersen

go-Digital Blog on Digital Marketing

Augustine Fou's Opinions, Rants, Raves about Digital

1 Comment to This is what happens when 99% of the inefficiencies are cut out of a system (advertising industry)

Leave a Reply

Digital Consigliere

Collaborators – Digital Profs

Pages

Popular Posts

Published Articles by Dr. Augustine Fou

Favorite Sites

Prototype Web Services

Archives

go-Digital Blog on Digital Marketing

Augustine Fou's Opinions, Rants, Raves about Digital