Gideon Spanier: Ad-buying giant GroupM steering the right course through digital
By Gideon Spanier, The London Evening Standard
Dominic Proctor is a Mad Man who also needs to become a Maths Man - just like the rest of the advertising industry
The president of GroupM, the world’s biggest media-buying business with $90 billion (£53 billion) of annual billings or about 30% of the global market, knows clients increasingly want to use digital technology to buy their ads in a more measurable, targeted way in real time.
“GroupM is not so much a media-marketing company. It’s a data and technology business,” declares Proctor, explaining how the WPP-owned group is changing. The mood is sunny at this week’s Cannes Lions, the industry’s biggest trade fair, as forecasts suggest the ad market will rise 5% in each of the next three years thanks to the mobile boom and economic recovery.
Cannes is billed as a festival of creativity, with celebrity speakers from Bono to Sarah Jessica Parker. Says Proctor: “This is largely a festival about what you can’t measure. Cannes’ roots are very much in the creative business, as judged by creative people. That’s an extraordinarily good thing.” But there are changes. “It has become a much broader festival, including a lot of things that can be more accurately measured.”
The evidence is the presence of the new digital media owners such as Google and Facebook, he adds, noting they are out in greater numbers than traditional broadcasters and publishers. The rise of the tech giants shows “you need to be big”, claims Proctor, pictured.
Scale matters not only in terms of ad-buying power but also access to technology and data. “You and I could start a creative agency tomorrow. You couldn’t start a media agency,” explains Proctor. He founded Mindshare for WPP in 1997 as buying and creative ceased to happen under one roof.
GroupM followed as an umbrella organisation, housing agencies Mediacom, MEC and Maxus — partly to avoid client conflicts. The big idea is using scale to win better prices.
Critics complain about its dominance and robust negotiating. GroupM briefly pulled its ads off Channel 4 last year, and even Daily Express owner Richard Desmond claimed he lacked the “testicles” for a battle with Proctor’s team. But analysts believe GroupM’s scale has compelling logic. When Omnicom and Publicis tried to merge this year to create a media Goliath with a 36% market share, it “completely validated” GroupM’s strategy, argues Proctor.
The group has been on a roll, winning Vodafone, Marks & Spencer and CompareTheMarket as rivals were distracted by merger talk. Its data-driven approach is also yielding results.
For a campaign for Kleenex, Mindshare looked at 18 months of Google search data to analyse how flu was likely to spread. Then it tracked search words in real time, so ads were targeted by region, and money was not wasted during warm spells. Kleenex sales rose 40%.
The big buzz is about programmatic trading — using computer programmes to buy ads on a targeted, automated basis. Proctor expects it to “increase dramatically”. GroupM was trading about 5% programmatically last year. Now it is 10%. “It is the beginning of the breaking down of the old formula, which was basically a buyer telephoning a seller for every spot and space.”
Proctor sees other shifts. Digital can allow GroupM to buy ad inventory in advance and trade it later in a form of “arbitrage” like in the stock market.
Life is still tough as the digital giants get bigger while clients keep demanding lower prices. So it’s no wonder GroupM is seeking new revenue beyond ads, setting up TV production arm GroupM Entertainment to make shows for broadcasters.
But Proctor remains optimistic about the role of the media agency. “It’s the job of a navigator,” he says, sitting near the crowded Cannes harbour and surveying the complex media scene.
Link to article here: