Global Industry Analysis: Advertising

Global Advertising
Industry Analysis
MFSA – A
Submitted By
PGP/23/079 – Swaroop Raj
PGP/23/389 – Praveen Raj
GAP Analysis
• A shift in the market to more digital measures has increased rivalry as agencies
Trends adapt their business models to suit their customers.
• FMCG companies, which account for a significant proportion of revenue for

several companies, are currently slashing advertising budgets.
• Five automakers have already turned to the capital markets to secure credit
lines worth some $55bn to see them through the crisis, indicating that
expensive advertising campaigns are least important
• WPP has seen a plateau when it comes to growth in the last 3 years with near
Triggers constant revenues.
• WPP has eastablishwed WPP Digital to acquire companies in the digital

marketing space to aid the company growth.
• It acquired The & Partners London to increase its presence in sectors outside its
traditional hold.
GAP Analysis
• WPP has a history of long Lead time before an acquisition becomes effective
and profitable.(Exhibit 2)
Potential • Sectors catered to by WPP has little scope of growth with few secctors already
in decline.
Gaps
• Reluctance to venture into High growth Geographies with strong competitor
Foothold.
• WPP has been negligent when it comes to diversifying clients and has 80% of
its client base in 4-5 sectors
Known
Gaps • WPP is traditionally late to react to competitors moves due to its rigid org
structure.
• Operating margins of WPP have been on a decline since the last 5 years due to
internal inefficiencies
Competitor Response Profile
Competitor’s Drivers Competitor Actions/Capabilities
Objective Strategy
• Top Line Growth (Acquisitions) • Pursuing Inorganic Growth strategies to
• Sector Diversification increase Top line.
• Gaining Foothold in Digital Space • Staying away from strong competitor's
footholds to avoid declining profit margins
Competitor Response
Profile
Assumptions Resources & Capabilities

• Can sustain growth in its traditional sectors. • Loyal Clientele
• Tough to build expertise in emerging sectors • Offers a range of specialist, customized,
from ground up. multicultural marketing services to youth,
sports events.
• Strong B2B and Corporate Marketing portfolio.
Industry Evolution
• Globally, the advertising industry is highly consolidated and dominated by the 'big four'
agencies, Omnicom Group, WPP plc, Interpublic and Publicis Groupe SA, along with a small
number of umbrella advertising agencies, who hold a substantial aggregate industry share.
• Their large size intensifies

competition. The global
advertising industry has
experienced moderate
growth overall in recent
years. The trend is expected
to continue for the coming
few years.
• The industry has lot of experienced buyers and the emphasis is now on cost and advertising
efficiency (Return on advertising dollars).
• The consolidated industry has a lot of international competition. The profit margins for all the
companies have been shrinking thereby putting a lot of pressure on the incumbents to search for
new ways.
Strategy For the Future
● Speed and efficiency in programmatic online advertising, which social platforms are most effective at
providing should be developed
● Players can attract new clients based on their niche expertise and reputation so this is an area which
companies should look at.
● Expertise and foothold in new segment of the advertising industry like video game advertising should
be developed
● Cross device targeting is increasingly being used as a means of targeting the largest possible audience
base, therefore the companies should start specializing in cross device advertisements.
● Companies should experiment with newer pricing structure due to the experienced buyers in the
industry who have been constantly emphasizing on returns as the new metrics
● Companies should try to increase the purchase of the existing customers across different media
platforms
● Acquire smaller players with niche capabilities as it difficult to develop competencies organically
● Venture into other countries in order to keep the growth on a pedal

S Curve – Advertising Industry
• The Industry is being upended by

Digital Advertising Technologies.
• It is Currently at he Transition
stage of the Double S Curve.
• With the Traditional
technology/channel usage Digital
plateauing. Advertising
• Digital Ads boom is fueled by
increased internet penetration in
Developing Economies
Traditional
Advertising
Scenario Planning
The Transactional You The Creative You
Data is key in the first scenario. It allows specific In this scenario, human creativity is the source of
consumer targeting with transactional advertising highly efficient campaigns that are perfectly tailored
messages on the right channel at the right time. to the individual preferences of consumers and create
a strong relationship between consumers and brands.
The Entertained Masses The Fragmented Masses

In the third scenario, creativity is the basis for In the last scenario, brand is the differentiation
blockbuster campaigns with high quality and factor. The aggregation of specific niches is the key
immense reach. Brand-building is more important to reach and relevance.
than transactional marketing.
Fundamental Changes in Strategy and structure
Integrating end to Technology Human Resources

end solutions Strategy strategy
Enriched with data about how
It will become standard to Employers compete for experts with
consumers interact with
integrate solutions for scarce, specialized skill sets.
advertising, technology
customer journey Demand for data scientists, analytics
substantially optimizes
management, email, mobile, experts, and creative minds is huge
campaigns to perform better.
social, web personalization, at present and will remain high and
Firms need to build such
advertising, content recruiting should look at such
upcoming capabilities and
handling, and analytics. candidates
integrate them into traditional
advertising
Diversification
Strategy
After print, TV will also lose its importance. New sources of income should be looked at and
companies should diversify in a manner such that they remain relevant
Strategy Canvas
High
Omnicom
Industry
Low
Technology Suite Geographical Emerging Switching

Fixed cost
Adoption Size presence clientele cost
ERRC Grid
Blue Ocean Strategy
• Digital advertising will be the go-to advertising in the future as everyone is

talking about
• But it is in the nascent stage when it comes to using emerging technology
• The suggested strategy would be using technology embedded advertising
leading to personal customization of content
• Technologies like AI, ML can be used to study the user and customize content
according to customer specific needs
• This will evolve as a space which will create very high value and efficiency
• There would be virtually no competition as these innovations are tough to be
replicated
• Companies which moved to inhouse advertising also would come back as they
can’t do such customization
Thank You
Exhibit 1
Exhibit 2
Exhibit 3

Global Industry Analysis: Advertising

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Global Advertising

• FMCG companies, which account for a significant proportion of revenue for

• WPP has eastablishwed WPP Digital to acquire companies in the digital

Competitor’s Drivers Competitor Actions/Capabilities

Assumptions Resources & Capabilities

• Their large size intensifies

● Venture into other countries in order to keep the growth on a pedal

• The Industry is being upended by

The Entertained Masses The Fragmented Masses

Integrating end to Technology Human Resources

Technology Suite Geographical Emerging Switching

• Digital advertising will be the go-to advertising in the future as everyone is

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