Friday, August 25, 2017

Ad Agencies: Clients Moving Ads Online

Giant ad agencies’ biggest clients are moving business online — siphoning profits away from the Mad men, report The NYPost.

Behemoths like WPP, which saw its stock plunge 11.5 percent on Wednesday after reporting an unexpected slowdown in ad spending, are overly dependent on large advertisers, Michael Nathanson of MoffettNathanson said in a report.

Indeed, on looking at the Top 200 US advertisers, Nathanson found they accounted for 64 percent of TV revenue last quarter.

Yet these same large advertisers — mostly dependent on traditional agencies — provided only 29 percent of Internet revenue.

The distinction is key to understanding why traditional advertising fell 4 percent last quarter — the worst decline in a non-Olympic quarter since the recession ended in 2009.

By comparison, digital advertising continued to hum with a growth rate of 23 percent.

Last quarter’s gain in online advertising made up 128 percent of the 8 percent gain recorded for all of US advertising, according to MoffettNathanson.

Spending on traditional media, meanwhile, is projected to fall 7 percent in all of 2017.