The reality is that growth in digital-ad spending isn't
happening in display, and that 's hurting everyone -- from the
traditional powers of digital media to the online arms of media
companies. Brands don't want banners; they want deeper engagement
through social media. With that in mind, we see four big trends in
digital media for 2012:
1) Battle for "premium." The question of who owns Yahoo should
be resolved soon, but more important is whether Yahoo (with
Microsoft and AOL) can create a so-called premium ad category by
gating off inventory in private exchanges. If the approach works,
expect a flurry of alliances between publishers to create scale for
advertisers this way.
2) Accelerated consolidation. The battle to own the pipes for
digital advertising is on, and Google is in the pole position.
Expect Google to complete another sizable deal to fill out its
product offering. Microsoft , which has spent the last three years
obsessed with search, will also get back into deal-making by buying
AppNexus for its exchange and real-time buying capabilities. Adobe
will also play in this space, as will MediaOcean and perhaps a
scaled data player, like Axciom.
3) Companies over features. Advertisers and agencies cannot do
business with hundreds of different startups. This year a bright
line will be drawn between those that can solve sticky marketing
problems and those with features that might address part of the
problem. Some will fire their sales teams and integrate into ad
platforms like Google, AppNexus and others. Some -- those with the
least traction -- will just quietly go away.
4) Muddled economics. More money will flow into startups chasing
ad dollars, with ubiquitous "funds" adding to the venture-capital
froth. Newly public and highly capitalized Facebook, Glam Media and
Zynga will have the firepower to work with large brands, making
competition even tougher for traditional publishers.
Ownership issues and digital turf battles will continue
Ad spending will continue to grow in 2012, but more slowly, as
some marketers adopt a cautious attitude about launching campaigns
in a fragile economy.
That means shorter timelines for creative agencies to develop
initiatives -- what used to be given months to complete may now be
expected in days -- and the need to be ready to connect marketing
activities with cultural memes or events that generate consumer
For creative shops, in particular, the ownership issue will come
to a head, with turf battles about who does what when it comes to
digital creative, social media and PR. The questions will not only
spur infighting and damage collaborative efforts between agencies
but also complicate the process of entering award competitions.
Creative awards are enjoying a bit of a renaissance with regained
importance as more clients get involved in the process, illustrated
by the spike in marketers attending the Cannes Advertising Festival
of Creativity .
Cross-pollination of talent will have digital expertise heading
to full-service shops and those with broader backgrounds seeking
specialty work. But with a limited pool of trained creatives, the
industry will boost recruitment from outside the field,
increasingly turning to the tech, consulting and fashion sectors to
source agency staff.
Media shops will look to leverage talent from creative,
This will be the year of measurement and analytics. It's a
tireless attempt to home in on behaviors and target audiences, both
online and off. The tendency is also in step with brands' desire
for real-time measurement, especially in social media, as evident
by a small crop of measurement or "listening" assignments last
Clients are enlisting media agencies, with their strength in
data and new technologies, for search-engine optimization and
digital-measurement tasks. Agencies are quickly acquiring the
capabilities that will enable customized programs for clients that
need to invest in digital strategy.
And with smartphones reaching penetration rates of more than
50%, mobile planning and buying, as well as app creation, are
becoming part of digital departments. This year, agencies will also
begin to integrate more digital and mobile experts into their
traditional buying and planning teams, bringing in nontraditional
talent from creative and digital shops .
After spate of major acquisitions, industry will seek to
digest them With fewer agencies of scale still privately
held, the big holding companies will spend the better part of the
year sorting out past acquisitions rather than buying shops to plug
the digital gaps in the services they offer. Exceptions: geographic
expansions to help fill out the glogal map. Aegis, left with
only media and digital agencies after selling its research company,
is a possible acquisition target .
Publicis Groupe is evaluating how its almost $3 billion worth of
digital-agency acquisitions can make the holding company, including
"traditional" siblings like Leo Burnett and Saatchi & Saatchi,
more digital. WPP, too, will have to consider Possible Worldwide's
limited success one year after it rolled up digital agencies to
create the global network to compete with Publicis' global
behemoths Digitas and Razorfish.
Digital pure-play agencies face a greater threat from the
technology side of the client-services business. After Sapient's
success in agency services, more IT consultancies are eyeing
With identity crisis averted, PR looks for right content
Knee-deep in social media for the past few years, the PR
industry has had plenty of time to mull over the role of digital in
an otherwise traditional PR environment. Agencies have realized
that social is just an addition to the strategy, media-relations
and crisis work they've been doing for nearly a century. PR
agencies are not transforming into digital agencies. Identity
Even so, content creation and management continue to be
important components of the marketing and revenue mix, augmenting
traditional earned-media and PR campaigns. Nontraditional hiring
will continue as a result, with agencies bringing in creative
talent with video-production expertise.
As clients attempt to reach new consumers and engage with them
globally and via multiple channels, they seek more support from
corporate communications and branding -- as opposed to
product-centered -- marketing. The shift is one of many that
emphasize the hiring of industry and marketing specialists vs.
generalist PR talent. For example, multiple agencies have hired
Ph.D.s in the health care sector and executives in the technology
Last, global expansion and investment in the BRIC countries is
finally paying off for larger PR firms.
Media spending set to rise in China, but so is media
The question hanging over the country is not how much ad
spending will grow in 2012 but whether it will be enough to
overcome media inflation.