] HipMojo.com » Is WPP Over-Exposing Itself to UGC?

Is WPP Over-Exposing Itself to UGC?

First VideoEgg, then MySpace China?

WPP recently bought 24/7 Realmedia (TFSM) to increase its exposure to the Web.  In 2006, Sir Martin Sorrell said that his company’s online unit would double in terms of revenue contribution, from 15% to 30%.

Clearly, to get there, it will take deals and investments.  While WPP outright bought TFSM, it has made investments, too (something that traditional media company CBS has been doing, too).

TFSM offers WPP many opportunities: in email, ad serving, as well as an ad network. As a remnant network, I’d presume TFSM already reaches a considerable amount of user-generated content, as such, WPP is quickly becoming a very aggressive traditional agency/marketing in this space: in addition to TFSM, the company invested in a Series C round in VideoEgg, one of the bigger video networks in the social networking video space, and today announced an investment in MySpace China. I totally understand the China part, but doubling up - or in fact tripling up - on social networking by way of MySpace is starting to expose WPP a tad too much on this space, one which despite the hype is set to grow to a $2.15B market by 2010, at a time when all online ads will be $30-70B.

Regardless, we commend WPP for realizing that online is where they need to be.

More importantly, we give props to News Corp. for understanding, like VideoEgg did, that having WPP as a strategic investor is key to getting global marketers to embrace user generated content, because if anyone has doubled up more on UGC than WPP, it’s MySpace and VideoEgg!

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Posted By: Ashkan Karbasfrooshan | Aug 30th

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