From a NYT article on the shifting agency business. Some tidbits that stood out, then some links back to previous posts we’ve made on the agency world:
Mr. Kenny is reshaping the digital advertising strategy for the entire Publicis worldwide conglomerate, which includes agencies like Saatchi & Saatchi, Leo Burnett and the Starcom MediaVest Group and the global accounts of companies like Procter & Gamble, American Express, Hewlett-Packard and General Motors.
The plan is to build a global digital ad network that uses offshore labor to create thousands of versions of ads. Then, using data about consumers and computer algorithms, the network will decide which advertising message to show at which moment to every person who turns on a computer, cellphone or — eventually — a television.
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“There’s a chance to invest right now in China, India, Russia and Brazil, which will pay off big over the next five years,” Mr. Kenny said. “These economies are going to boom, and ads there are going to go directly to mobile and directly to the Internet.”
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Greater production capacity is needed, Mr. Kenny says, to make enough clips to be able to move away from mass advertising to personalized ads. He estimates that in the United States, some companies are already running about 4,000 versions of an ad for a single brand, whereas 10 years ago they might have run three to five versions. And he predicts that the number of iterations will grow as technology improves.
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The Publicis digital plan can be viewed as a reaction to the changes in how consumers live, but it is also a response to competition among Google, Yahoo and Microsoft. Publicis is trying to carve out a niche as a middleman between those online giants and the consumer brand companies that buy advertising. The role is not unlike the way agencies have long connected advertisers to offline media like television networks, newspapers and magazines.
“How do we see Google, Yahoo and Microsoft? It’s important to see that our industry is changing and the borders are blurring, so it’s clear the three of those companies will have a huge share of revenues which will come from advertising,” said Maurice Lévy, chairman and chief executive of the Publicis Groupe.
“But they will have to make a choice between being a medium or being an ad agency, and I believe that their interest will be to be a medium,” he added. “We will partner with them as we do partner with CBS, ABC, Time Warner or any other media group.”
Mr. Lévy’s view of the dominant Internet portals diverges from that of other advertising executives. Martin Sorrell, chief executive of the WPP Group, another ad agency conglomerate, has publicly called Google a “frenemy” and has recently acquired 24/7 Real Media, an advertising network that positions his company to compete more directly with Google and other online portals.
Mr. Lévy, who has a penchant for grand ambitions, says he does not plan to compete with Google — rather, he wants Google to need Publicis.