And the executives to watch for the answers
It was a big year for advertising advancements and controversies, as agencies, media companies, and measurement and digital firms sought new ways to reach and track today’s elusive consumers. But questions remain for the top companies in the ad business as we head into 2018. Here are just a few of the biggest question marks—and the people who may hold the answers.
Will Amazon become an advertising powerhouse?
Amazon has quietly been building up an ad business that includes search and banner ads on its e-commerce platform and ads around its streaming NFL games for Amazon Prime members. It even uses its prized data to help advertisers target audiences on other websites. But the ad business hasn’t been a top priority for Amazon…until now. Under Amazon’s vice president of global ad sales, Seth Dallaire, the company is more aggressively courting ad buyers. Those advertisers and the holding companies that guard their billion-dollar budgets are taking note and working with Mr. Dallaire’s team to find new ways to spend with the coveted e-commerce giant. It may take years to pry a meaningful amount of spending from the so-called advertising duopoly of Facebook and Google, but his efforts are worth watching regardless.
What impact will Marcel have on Publicis’s business?
Publicis this summer set off a shock wave in the ad industry when it announced it was pulling out of Cannes and other large events in 2018 to save money to invest in Marcel—an “artificial intelligence” platform to facilitate more collaboration and communication among its global offices. The technology may also help the agency use its resources more efficiently. It’s a bold bet by Arthur Sadoun, who took over as chief executive of Publicis in June, at a time when the business is grappling with client spending cuts and change brought on by the shift to digital advertising. Madison Avenue will be keeping an eye on how Marcel helps evolve the challenged ad services business in ways humans can’t.
How will Nielsen evolve its business?
Nielsen has long reigned over TV viewing measurement—the crucial metrics that underpin most networks’ advertising sales. But as viewing habits shift from traditional TV providers to a range of digital platforms, the company has had to scramble to find new ways to capture audiences across devices and services and then convince media buyers and sellers to adopt new metrics. Nielsen has made strides in cross-platform measurement, finding new ways to better measure viewing outside of the home, on Netflix and on other digital media platforms like YouTube. Still, in its “Watch” division, which houses the media measurement products, the company’s “Total Content Ratings” metric has been met with skepticism by some TV networks. And its “Buy” unit, which includes measurement and analytics products for packaged goods brands and retailers, also has come under pressure due to the “challenging fast-moving consumer goods environment in the U.S.,” according to a recent earnings statement from Nielsen CEO Mitch Barns. In the year ahead, all eyes will be on Mr. Barns. Will he consider building out new digital measurement capabilities through acquisition or even spinning off parts of the business?
Will WPP continue to consolidate its shops or take more drastic measures?
WPP has had one of the toughest financial years in its history, with few signs of a sustained turnaround in the new year. As the largest ad holding company in the world grapples with client cutbacks and changing consumer habits, WPP is rethinking its organizational structure to create more marketing integration, flexibility and cost efficiency for clients. WPP CEO Martin Sorrell has spent the past year combining various agency groups within the holding company. He moved digital agency Possible into Wunderman and reduced the company’s media agency portfolio by moving Maxus people and resources into MEC (which was renamed Wavemaker) and Essence. He also clumped together health-care and branding agencies. But there’s still more work to be done for WPP to get back on track. Will Mr. Sorrell continue to consolidate his shops or take more drastic measures, such as merging with a large consultancy or selling underperforming assets?
Will Accenture and other consulting firms start to be a real threat?
Pierre Nanterme didn’t build a career on Madison Avenue. But the Accenture CEO is one to watch as the consulting firm continues to muscle its way into the marketing services business. To boost its Accenture Interactive group, the company has acquired numerous ad and marketing firms, including Matter, Rothco, Clearhead and Wire Stone in 2017 alone. Large consulting firms are no match for ad holding companies quite yet, but they’re certainly top of mind for ad executives gearing up for heightened competition. Perhaps 2018 will be the year Accenture—or its rivals—make a more aggressive acquisition play, or start to win more large and lengthy marketing assignments.
Will advertisers stick with Snap?
It has been a bit of a rough year for Snap. In the months since its public offering, the company has seen its share price falter and user growth slow significantly amid heightened competition from much larger rival Facebook and its Instagram platform. But the company in recent months has focused its efforts on getting users to log on more frequently, starting with a redesign to simplify the Snapchat app and promote more relevant content. Snap also has been working to build out its ad sales operation under Viacom veteran Jeff Lucas. Still, it remains to be seen if the company can get its user growth back on track, and whether advertisers will continue to increase their spending with Snap or refocus their energies on another player that can reach younger consumers and potentially challenge the duopoly.
This article first appeared in www.wsj-com.cdn.ampproject.org
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