Nothing like a little foreign prodding to fuel the flames of ad agency competition.
As this week's Media Buying & Planning Special Report notes, every day advances the way advertising time and space are purchased. And as agencies reinvent themselves for the 21st century, there's a lot of posturing and adjusting going on.
If there's one fundamental way shops are genuinely rethinking how they'll be different the morning of Jan. 1, 2000, it's in how the media department operates as a profit center. Enter into that equation Europe's Carat. In a recruiting document for a North American CEO, a search company describes the challenge as to build the Aegis Group unit's U.S. billings to $2 billion "through the introduction of a superior and distinctive Carat product, focused on differentiated/proprietary upstream services of a strong and expanding base of clients."
That sure sounds like the throwing-down of a gauntlet. And U.S.-based media-buying operations, whether integral to a major agency group or a powerful independent, are well entrenched for a jolly good fight.
We already know that when the smoke clears, the face of how TV time is analyzed, digitized and amalgamated will be strikingly different than in 1997. It seems the next generation of media buyers will have a whole new way of assessing the worth of any daypart, any show, any commercial pod within the TV universe, for example-and in the process have some serious, well-researched answers for the inquiring marketer, whose minds want and need to know.
As the media buying process and players change, there's a new, glowing report of what's ahead for the communications arts, with Veronis, Suhler & Associates issuing a particularly rosy forecast for industry growth. Coming just after Federal Reserve Chairman Alan Greenspan's latest praise for the economy, this would appear to be good news indeed.
According to the report in these pages last week, Veronis Suhler is projecting a 7.6% compound growth rate through 2001, up from a 7% forecast last year. That's two percentage points higher than the 5.6% growth rate predicted for the gross domestic product-a "quite exceptional" expectation for advertising and media, said Hal Greenberg, the company's managing director.
But John Suhler also said a good deal of the growth will come from "media that afford consumers a high degree of control," focusing some attention on the amount of leisure time being spent online or watching videos or listening to music-and "taking time from broadcast television and radio." There, in this era of growth, is the rub for the media gurus fighting for the ad dollars that will fill a media pie put at more than $400 billion by 2001.
Obviously, online ad spending will be on a fast growth track-fueled immediately by the news that Intel Corp. will invest $75 million of its co-op advertising fund into the Internet, a figure that will probably be matched by PC makers that cooperate in the Intel program-as will subscription TV (cable, direct broadcast satellite). DBS is projected to grow at a 17% rate and hit close to $15 billion in ad sales by 2001.
While that's heady growth, it's also an indicator of how the media marketplace is changing, and the smart shoppers will be those who through more sophisticated sorting methods can find the right place to be with their ad messages at the right point in time.