The Economist just published a great article on the future of advertising agencies, following the recent merger of the two giants Omnicom and Publicis.
It brings a few things to light that continue to make us data people feel like “it’s great to be us.” Here’s a quick rundown:
- The combined companies will save about $500M in costs, substantially increase their media buying power, and in the process control roughly 20% of of advertising spending worldwide. Wow!
- Online ad spending last year topped $88 billion, comprising 13.9% of advertising worldwide, and about one-third of all online ad spending is controlled by Google alone.
- All the analytical tools now available to clients have brought a lot of transparency, efficiency, and precision — potentially reducing the need for much of the strategy, management and interpretation traditionally provided by agencies.
- A growing number of the larger clients (e.g., P&G) now have their own “trading desks” where they can work directly with the ad exchanges and manage their own real time bidding (RTB).
- Surprisingly, with all the available technology, RTB is still a relatively small part of the digital ad business. Only around 19% of online display ads in America are now bought and sold in this way. But it is expected to grow to 29% by 2017.
And of course the piece ends with some great quotes: “The talent for creating memorable and persuasive ad campaigns will always be in demand… (but) the glamour of the ‘Mad Men’” era is in the past; these days the power is increasingly in the hands of the ‘Math Men.’”
Viva la “Math Men” (and Women)!