WPP

Why Google Is The Grinch Who Stole Your Business

Source: http://www.businessinsider.com/the-grinch-who-stole-your-business-2011-12


Google Sign

It’s that time of year when we all reflect on the past, search our souls and determine what we want for the next year. I’ve been reflecting on what it means to work with a company that controls so much of the market, provides such a broad set of capabilities and delivers such a large percentage of monthly revenues to publishers. Of course, I’m thinking of Google and what their dominance in the ad market means for a publisher’s future and its ability to remain relevant to marketers.

What do we know about Google? They are this great company that gives consumers some of the best digital products available on the Web: search, email, maps, Android, apps and more. This has catapulted Google to the rank of second most valuable brand, behind only Apple, according to Millward Brown. This seems to be great for consumers, but what about the businesses who are now reliant on Google for search and display revenue, advertising technology and various business applications like Google docs, Android OS, Chrome, etc.?

Many of the businesses I meet with hold Google in high regard because of the products they represent and the amount of revenue they provide. However, these businesses are equally concerned about Google’s consumer stranglehold, their influence over the ad ecosystem and their focus on automation, all of which lessens the publishers’ worth in the value chain as a whole. Google’s market dominance stretches well beyond search, which in itself is obviously enormous. This expansive dominance should be alarming for every marketing-related business, including publishers, advertisers and agency and marketing services technologies.  Here are a few stats on Google by category that will likely frighten even the largest of these businesses:

  • 65.38% Share of Search, Oct-11 Hitwise
  • 44.1% Share of Ad revenue, Oct-11 PCMag
  • 43.8% Share for Video, Oct-11 Comsccore
  • 30.03% Share for Travel, Oct-11 Comscore
  • 22.38% Share for Automotive, Oct-11 Comscore
  • 18.69% Share for Shopping, Oct-11 Comscore
  • 16.29% Share for Health, Oct-11 Comscore

If these stats weren’t enough to dampen your holiday spirit, Google now is even prioritizing their own products above the paid search listings on their search engine. This creates a major conflict for the advertisers that have made Google what it is today and may force those clients to pay even more if their advertising is to remain competitive in this new bidding landscape. Google clearly is leveraging its position of power with consumers to launch new products and ensure their own success. The latest example of this is the promotion of their Chrome browser on the Google homepage. As you can see from the chart below, Chrome is rocketing to the position of #1 browser, a rank it is projected to achieve by June 2012.

Google is now a major threat to every business in the publishing and advertising marketplace. In the short term, while they may appear to be a superior partner that provides revenue and marketing innovation, I believe that over the long term they are eroding the value of each and every business in the media sales and publishing value chain. And, worst of all, they are charging heavily for the privilege. I’d estimate that for every dollar spent by an advertiser in the media buying process, Google captures upwards of 25% in tolls (via their various ad services, DFA, Invite, DFP, AdX, Motif, Admeld, etc.), thereby minimizing revenue and profits for publishers and other vendors along the way

So as you reflect on 2011 and consider whom you want to partner with in 2012, give some thought to the short versus the long term. What is your value proposition to clients? And who do you ultimately want to run your business … the Grinch or You?

Have a great holiday and Happy New Year!

The views expressed here reflect the views of the author alone, and do not necessarily reflect the views of 24/7 Real Media, its affiliates, subsidiaries or its parent company, WPP plc

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Tuesday, December 27th, 2011 news No Comments

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%).

wasted-ad-dollars

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

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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,

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

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Thursday, August 27th, 2009 digital 1 Comment

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.

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