Mad Men 2.0: Advertising in the Digital Age
To be sure, we live in interesting times. Statistics have proven what we already knew: An increasing number of people are spending even more time on the internet each year. The net (remember the days when we called it the world wide web?), which was accessed almost exclusively from desktop computers just over a decade ago, is now almost ever-present.
Laptops, smartphones, and tablets have allowed users to bring the web with them wherever they have cellphone reception or wi-fi (even on buses, trains, and airplanes!). The current generation of videogame consoles (Xbox 360, Playstation 3, Wii), Blu-ray players, and TVs now come with seamless internet integration, which will help get internet media, such as YouTube, Hulu, and Netflix, off of small laptops and tablets and onto much larger displays.
These tech marvels are continuing to change the way that people interact with and absorb media and information. This, in turn, has opened the floodgates of new and innovative advertising and marketing strategies.
One of the most successful ad models over the past decade has been the online display and targeted search ad models dominated by Google, Yahoo!, and Microsoft. More recently, Hulu has been able to capitalize on ad-sponsored online TV, Groupon has revolutionized local coupon advertising, and Amazon has tried selling ad-subsidized versions of their popular Kindle eReader.
Online advertising innovation will continue as the internet becomes more ubiquitous (more smartphone users, possible mobile phone payment systems, etc). Here are things to look forward to (or not, depending on your appetite for advertising) according to BusinessInsider:
- more ads on the web, fewer on TVs and non-digital media
- automated ad purchasing (NASDAQ-esque digital exchanges for advertising have begun cropping up)
- ads that know who you are (see Facebook and Google ads linked to your profiles or email address)
- ads that know where you are thanks to GPS and other location services
- ad-subsidized products that are cheaper (like free iPhone apps and cheaper Kindles)
Internet advertising is currently a $30B game in the US, which accounts for 15% of all advertising (excluding political spending), and is about half of the TV ad market.
Interested in finding the best and most creative ad agencies? Here is a list of the ten largest ad agencies listed on American stock exchanges.
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List sorted by market cap.
1. WPP PLC (WPPGY): Market cap of $15.49B. Major clients of its subsidiaries include the NFL, Canon, Toshiba, Kraft, 3M, Volkswagen, Coca-Cola, Xerox, Gap, Sony, De Beers, Heineken, Unilever, Barbie, Time Warner Cable, Boeing, Disney, the BBC, Rolex, Samsung, and Jaguar.
2. Omnicom Group Inc. (OMC): Market cap of $13.65B. Major clients of its subsidiaries include AT&T, Gillette, HBO, Snickers, GE, M&Ms, FedEx, Pepsi, Lay’s, Nike, Philips, AB/InBev, Volkswagen, Clorox, Gatorade, the Grammy’s, and Absolut
3. The Interpublic Group of Companies, Inc. (IPG): Market cap of $6.15B. Its largest clients include General Motors, Johnson & Johnson, Microsoft, Unilever and Verizon. Other clients include Microsoft, Subaru, Harley-Davidson, Electronic Arts, Honda, Oreo, and Taco Bell.
4. Focus Media Holding Ltd. (FMCN): Market cap of $4.28B. Clients include China Mobile, Nokia, Siemens, LG, Canon, Sony, Braun, Panasonic, Toyota, Nissan, Honda, Hyundai, Ford, Audi, McDonalds, Pizza Hut, Coca-Cola, Citi, HSBC, and Bank of China.
5. Monster Worldwide, Inc. (MWW): Market cap of $1.9B. It provides global online employment solution. Through online media sites and services, it delivers targeted audiences to advertisers. It works by connecting employers with job seekers at all levels and by providing searchable jobs and career management resources online.
6. ValueClick, Inc. (VCLK): Market cap of $1.36B. It is an online marketing services company. In addition to providing marketing and branding services to the general public, it also provides technology solutions for online advertisers, and online advertising and marketing solutions for advertising and marketing agencies.
7. ReachLocal, Inc. (RLOC): Market cap of $611.55M. It offers online marketing and reporting solutions, including search engine marketing, display advertising, remarketing and online marketing analytics, each targeted to the small and medium-sized businesses (SMB) market. It creates advertising campaigns for SMBs to target potential customers in their geographic area, optimize those campaigns in real time and track tangible results.
8. QuinStreet, Inc. (QNST): Market cap of $610.09M. It generates revenue by delivering measurable online marketing results to its clients. These results are typically in the form of qualified leads or clicks. These qualified leads or clicks are generated from its marketing activities on its Websites or on third-party Websites with whom it has relationships.
9. Charm Communications Inc. (CHRM): Market cap of $462.63M. It is a television advertising agency in People’s Republic of China. Clients include Subaru, Ford, GM, Bank of China, China Telecom, China Mobile, and a host of Chinese brands.
10. MediaMind Technologies Inc. (MDMD): Market cap of $418.06M. Its clients include Volkswagen, Chanel, Citroen, Microsoft, Nike, movie franchises (including The Green Lantern, Avatar, and the Hangover 2), Mercedes-Benz, Fiat, Tata, H&M, Colgate, Katy Perry, and McDonalds.
(List compiled by Andrew Dominguez)