US Advertising Overview by Datamonitor (The Home of Business Intelligence):
– $260 billion;
– 14% of this went to advertising agencies
– annual growth of approximately 3% forecast for the next five years
– the online advertising is the fastest-growing sector
Online Growth – A soaring online population in the US has attracted the attention of advertisers keen to expand their potential audience. Online advertising allows advertisers to target specific consumer groups, and Internet use is greater among consumers with higher disposable incomes.
Such features are generating massive demand for online advertising solutions.
Older Media in Decline
Older Media in Decline – A decline in newspaper circulation and dwindling viewers per channel for the major US TV networks is leading to a change in the pattern of advertising expenditure as advertisers look to maximize their potential audience by matching consumer media consumption patterns.
Procurement Officers – Procurement officers employed by advertisers clients are arranging the purchase of advertising, and auditing its effectiveness. This has stimulated competition, creating significant pricing pressures while dampening margins through additional costs as clients demand more complex information regarding their advertising solutions.
Innovation – Advertisers are exploiting new media platforms to expand their potential audience and drive sales. The online segment witnessed heavy investment in coordinated search and display campaigns in 2006, while the introduction of DVR with its ad-skipping facility has lead to innovation in TV advertising, with product placement now a major alternative to traditional advertisements.
Business Optimization – Through the analysis of metrics associated with user segmentation, traffic and Cost per Keyword (CKP), advertisers are able to monitor the effectiveness of their campaigns, making adjustments to maximize return on expenditure.
M&A Activity – Strategic acquisition remains a key growth driver for the major players. By acquiring companies with a strong performance in online or mobile advertising, firms are gaining immediate expertise and market share within these growing sectors, while obtaining inorganic growth in revenues.
Top 10 revenues as of Mar 09, 2007 (M):
1. Omnicom Group Inc. – $11,376.9
2. WPP Group plc (ADR) – $11,149.2
3. Interpublic Group of Companies, Inc. – $6,190.8
4. Publicis Groupe S.A. (ADR) – $5,661.1
5. Clear Channel Outdoor Holdings, Inc. – $2,897.7
6. Havas (ADR) – $1,940.8
7. Source Interlink Companies – $1,845.3
8. Liberty Media Corporation (Capital) – $1,287.0
9. Lamar Advertising Company – $1,120.1
10. Monster Worldwide, Inc. – $1,116.7
Datamonitor is a premium business information company specializing in industry and company analysis. Their reports cover up to 165 industries in over 10 geographies and can be reliable Business Intelligence – their services are used also in Romania and some of the reports can be quite handy (the “Advertising in China” 19 pages report for example can be ordered online and it costs around 200$).