GroupM’s new publication – Media Landscapes, has Top GroupM executives Rob Norman, GroupM Senior Advisor and Brian Wieser, Global President, Business Intelligence, provide a portrait of the media industry with an eye towards the ways in which it affects the large brands.
The purpose of this paper according to them is to view the media landscape through the prism of the expenditure of large advertisers and to examine some of the key protagonists that impact media supply. However this can be possible through the lens and the role of a media agency as big as GroupM. They examine some of media’s key protagonists through essays on:
MEDIA FRAGMENTATION: How concentrated or fragmented are media suppliers to the world’s largest advertisers? We explore this through GroupM’s spending shares among media suppliers and find it is relatively more fragmented than many observers might think.
DIGITAL MEDIA GIANTS: How have the world’s largest digital media players impacted the industry and the world more broadly? To what degree will regulators or other factors constrain them?
TV/FILM STUDIO AND NETWORK OWNERS: How are streaming services impacting the business models of traditional video-centric companies? How will they evolve in the future?
TELCOS AND CABLE OPERATORS: Convergence used to be a buzzword, but now it is a reality for many companies. Why has the move into media for facilities-based companies (cable operators and telcos) worked well for some, but not for others?
NON-AD SUPPORTED COMPANIES: Many of the companies who are most impacting advertising either have no advertising or do not depend on it. How does their presence within the industry impact everyone else?
MEDIA AGENCIES: With fragmentation and complexity likely to be permanent features of the industry, we summarize our report by emphasizing the continuing relevance of media agencies.
So what is it that threatens Google and Facebook? This paper by GroupM attempts to answer this question by simply saying that ‘Regulation’ is easily the biggest threat for the two giants. A boycott by advertisers is no threat at all; advertisers go where the customers are. The small businesses that drive perhaps half of Google and Facebook revenue are focused on ease of buying; most others (including many large advertisers) are pragmatic about user-generated content.
On how Facebook’s announcement of the consolidation of the data engines of WhatsApp, Messenger and Instagram could prove to have a black lash at the Zuckerburg led company, the paper talks about that in the name of end- to-end privacy should be seen alongside its energetic development of Instagram commerce and Libra. Messaging, storefronts, commerce and currency represent a radically evolved model for the company. These initiatives will be viewed by some politicians and regulators as aggressive moves, and may see a backlash as a result.
At Google, the threats are three-pronged. Regulators appear focused on their ownership of Android, the social consequences of YouTube and their market dominance in both search and the ad tech ecosystem. Google’s grip on app revenue is also loosening, as a number of major developers are bypassing the Play Store—because they are able to and perhaps because they believe Google is in a less-strong position to enforce its gatekeeping position.
What can we learn from China?
On how Baidu, Alibaba and Tencent are often seen as the Chinese analogs of Google, Amazon and Facebook. The paper talks about the comparison of these business conglomerates and the learning that we should derive from the Chinese companies. It’s an easy but incomplete comparison. Baidu’s business is centered on search and video and is highly advertising dependent. Tencent’s core revenue sources are gaming, in-game purchasing, payments and share of service revenues. Alibaba is perhaps the most interesting. Unlike Amazon, the world’s biggest e-commerce marketplace has had advertising at its core almost from inception. Alibaba built and maintains storefronts, marketplaces, logistics and a promotional ecosystem in which almost every brand in China participates. If Tencent represents one version of a future Facebook (as we referenced in our “Opportunity and Hazard” paper), then Alibaba may represent a future state of Amazon, at the expense of every one of its digital and analog competitors.
The paper with all the detailed essays truly provide an in-depth analysis of what the media landscape looks like through the lens of a media agency with the big dollar billings of a GroupM. The paper also analysis how their clients allocate their paid media investments to learn four main things.
1. Who are the largest suppliers?
2. How is spend allocated between global, regional and local sellers?
3. What is the market position of Google and Facebook for our clients, as opposed to all advertisers?
4. What is the overall allocation between media types around the world?
The Media Landcape is available on :
