More Gain, Less Strain

Optimizing Marketing Partner Performance and Value in a Digital World

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Overview
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Research
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Overview

A wide range of forces and factors are testing traditional agency-client relationships, multiplying marketing procurement needs, complicating purchasing cycles worldwide, as well as reshaping and diversifying the marketing mix. In addition, evolving agency models and alternative marketing service providers and channels are demanding new evaluation and assessment practices, closer linkage of measurement criteria to business value, and better ways to quantify and justify global marketing spend and agency investments.

Harmonizing, synchronizing and unifying distributed agency assets and global marketing resources across both demand and supply chains, necessitates the deployment of database and process-driven operational marketing models and performance platforms that further accountability, output, productivity, efficiency and effectiveness. Closer alignment and linkage with procurement and purchasing professionals within global enterprises is also enabling marketers to bring greater rigor, structure and discipline to the agency consideration, evaluation, selection and review process.

This authority leadership initiative combined qualitative interactions with senior global marketers in top advertiser organizations with a comprehensive quantitative audit of both operational marketing and agency account management stakeholders involved in the supplier relationship, performance and procurement process.

Research: Reports

Report

Jan 23, 2012

More Gain, Less Strain

This study reveals that ad agencies are struggling to evolve in the digital age, resulting in high turnover of interactive marketing firms. On the flip side, clients lack creative ad scoring systems and formalized campaign metrics. ... More

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Facts & Stats

The Publicis-owned agency said client advertising dollars directed to each of those areas ramped up significantly last year, with its overall billings up 20% in 2010 and expected to increase 25% this year. MediaPost

While one-fifth said they anticipate spending more on digital than traditional media within “one to three years,” more than a third (36%) said digital will never dominate their advertising budgets. MediaPost

While the third-quarter survey indicated that advertising budgets remain relatively stable and continue to grow overall, the agency respondents said print (52%) and local TV (24%) are the media most likely to take a hit by ad spending cuts. MediaPost

In five years, worldwide online advertising sales for TV/video programming will grow to $9.8 billion from $2.2 billion. But subscription fees will climb at a faster pace, rising to $5.6 billion from $626 million in 2010. Advertising share of the online business for TV/video is projected to drop to 46% from 63%. MediaPost

Global online TV and video revenues will grow five times their current size to reach $21.52 billion in 2016 from $3.48 billion in 2010, according to London-based media research company Digital TV Research. MediaPost

In the U.S., year-to-year ad-spending growth in the second quarter slowed but didn't stop, according to both Nielsen and Kantar Media. MediaPost

40% of shoppers recalled seeing an outdoor advertisement. 8% of shoppers had heard a radio ad, 4% each had seen a TV or internet ad, 3% a newspaper ad and 2% a magazine ad. Of all the 274 respondents who said they had seen or heard an advertisement in the half hour preceding shopping, 88% had seen outdoor advertising. The Drum

Research from the Outdoor Media Centre has found that in the run-up to shopping, 88% see outdoor ads, and 72% of shoppers can be swayed towards a product by outdoor advertising. The Drum

As the economy began to bounce back last year, the top 50 b2b advertisers spent an estimated $3.74 billion on b2b ads, up 7.5% from $3.48 billion in 2009, according to an analysis of ad spending data from Kantar Media. BtoB Online

Global advertising spend rose 8.8% year-over-year in Q1 2011 to total $118 billion USD based on published rate cards, according to Nielsen Global AdView Pulse data. Nielsen analysis indicates heavier TV spending, as well as increased investment in the Latin American and Asian consumer markets, drove growth. MarketingCharts

Spending among the 10 largest advertisers in the first six months of 2011 was about $8,.2 billion, a 0.5% decrease compared to a year ago. MarketingCharts

Within the TV sector, which experienced 1.8% growth overall, expenditures on cable networks increased 11.8% during the first half of the year while network TV spending fell 7.6 percent. MarketingCharts

Among the top 100 marketers, a diversified group accounting for more than two-fifths of all measured ad expenditures, budgets rose a "miniscule" 0.8%, Kantar reported. MediaPost

While Kantar's total measured media ad spending rose 3.2% to $71.5 billion during the first half of 2011, budgets for the top 10 advertisers actually fell 0.5% from the first half of 2010. MediaPost

National cable ad spending for 2011 is estimated to increase by 12%. MediaPost

US advertisers are expected to spend nearly $77 billion on interactive marketing by 2016—as much as they now spend on TV—according to a new report by Forrester Research. MarketingProfs

By 2016, search, display, mobile, email, and social media together are expected to constitute 35% of all ad spending, up from 19% in 2011. MarketingProfs

Mobile and online video viewing continues to increase, while TV advertising spending went up 8 percent in 2010, per Nielsen. Mobile Marketer

Total TV use in the United States averages more than five hours per day, according to Nielsen data from April. Mobile Marketer

Eighty-five percent of online US adults have viewed a digital ad of some type in the past seven days, according to other study data which indicates affluent Americans (those with a household income of $100,000 or more) have viewed digital ads at a slightly higher rate (88%), while other Americans have viewed them at a slightly lower rate (84%). MarketingCharts

Data from “Affluent Consumers in a Digital World” indicates 41% of both video and search ad viewers have taken some type of action resulting from the ad in the past six months. MarketingCharts

82% planned no immediate changes to their budgets. If cuts were made to ad budgets, 50% of media buyers said that spot TV would be cut and 40% said print was likely to be cut. BtoB Online

About 7% of advertisers cut ad budgets and 11% warned of budget cuts in the wake of the financial gyrations that followed the U.S. debt downgrade, according to an online survey of media buyers conducted this month by Strata, which markets media buying software. BtoB Online

Millennials are much more likely to consume TV on their laptops (42% versus 18% of other generations), and somewhat more likely to watch it via DVR (40% versus 36%) or on-demand (26% versus 18%). MediaPost

Media-wise, Millennials watch significantly less TV than do other generations. Just 26% report watching 20-plus hours per week (versus 49% of the rest of the population). MediaPost

Millennials also report greater exposure to such campaigns through social media (40% versus 22%) and online news (28% versus 22%). MediaPost

As far as on-air promotions - the most effective way to promote a show - millennials not surprisingly appear tougher to reach. That's based on data showing about 25% only watch TV 5 to 10 hours a week. About the same percentage of non-millennials view between 21 and 30 hours. MediaPost

37% of affluent consumers say they are most likely to pay attention to an online ad that relates to whatever website they are on (such as a car ad on a car site), almost 16% more than the 32% of overall consumers who say this. MarketingCharts

Overall, six in 10 members of the total population who have viewed a digital ad in the last six months have taken some action in response. Affluent Americans slightly underindex (59%) for total response rate. MarketingCharts

Affluent Americans are also slightly more likely than the overall average to have viewed a web/banner ad (80% compared to 75%), search ad/sponsored listing (77% compared to 72%), video ad (65% compared to 62%), and mobile/smartphone ad (42% compared to 39%). They have the same rate of viewing a social media ad (59%), and are slightly less likely than the overall average to have viewed an email ad (69% compared to 71%). MarketingCharts

Eighty-five percent of online US adults have viewed a digital ad of some type in the past seven days. MarketingCharts

Two-thirds of those polled said they preferred to work with specialists versus full-service shops. MediaPost

While marketers wish their agencies would always work well together, close to two-thirds (62%) said they had experienced more "poor" agency integration than "great" agency integration. MediaPost

Nearly 90% of the survey respondents said that agencies are more likely to work together on specific projects and not on a regular basis. But just over one-third indicated that agencies that do focus on collaboration are most likely to ensure a "seamless multi-agency approach. MediaPost

(70%) said they believed their firms would be working with fewer agencies within the next five years. When asked why, nearly half (49%) cited the lack of time to manage multiple agencies, while almost as many (48%) pointed to reduced budgets. MediaPost

In-Stat says consumers now favor both traditional pay-TV and online video services, which have risen to 30% in 2010 from 18% previously. MediaPost

Right now, In-Stat says 22% of U.S. TV households already own an HDTV with integrated TV apps. Connected TVs with integrated TV applications will grow by an average 36% over the next five years. MediaPost

Over 60% of Internet-connected TV households use TV apps at least once per week, according to Scottsdale, Ariz.-based In-Stat. New wave TVs allow consumers to connect with Netflix, YouTube, Facebook, and more. MediaPost

Interestingly, Google+ demonstrated strong intent coming out of the gate, with 27% of agency executives stating that they plan to utilize it in their client's campaigns. MediaPost

Print advertising continued to struggle this quarter, with 56% of agencies saying they are less focused than a year ago. MediaPost

While TV remains the most important medium for advertisers overall, constituting 41% of the budgets reported in the Strata survey, the media processing firm said it is "steadily losing ground" to digital, which accounted for 24% of budgets. Radio ranked third at 13%. MediaPost

Many senior broadcast and cable network executives forecast -- and then claimed big CPM increases for this upfront period, anywhere from 11% to 13%. MediaPost

Donnie Williams, executive vice president, chief digital officer for independent media agency Horizon Media, estimates some clients shifted 8% to 13% more dollars into premium digital platforms during the recent upfront sales. MediaPost

52% of television customers reporting that they still watch regularly scheduled programming as it is broadcast, the current model will remain viable for the next two to three years, at a minimum. MediaPost

Just 3% of subscription TV consumers are "cutting the cord" of TV distribution systems -- cable, satellite, or telco -- per a survey from consumer researcher J.D. Power and Associates. MediaPost

Advertising revenues grew 4.4% to $32.5 billion in the first quarter of 2011. By comparison, the fourth quarter of 2010 witnessed a 7.0% hike and the third quarter stood at a strong 8.7% increase, with the second quarter at a 5.1% addition. - MediaPost

Television grew 9% to $18.8 billion in the first quarter of 2011 over the first quarter of 2010, according to the Nielsen Company. - MediaPost

TV advertising surpassed $18 billion in the first quarter of 2011, growing almost 9% versus the same period in 2010. - TVNewsCheck

Across 12 broadcast and major cable networks in primetime, there were 5,381 major product placements in 2010, up 22% since 2006. - TVNewsCheck

On average, ads that aired during the Super Bowl were 58 percent more memorable than all commercials that aired during regular programming in the first quarter of 2011. - TVNewsCheck