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GroupM

Irwin Gotlieb

Report by Irwin Gotlieb

Chief executive officer

GroupM continues as the leading global media investment management operation. We serve as the parent company to media agencies MAXUS, MediaCom, Mediaedge:cia and MindShare and represent WPP's consolidated media scale.

In 2007 GroupM made significant strides toward realizing our long-standing goal of providing our clients and agencies with a competitive edge through the intelligent application of physical and intellectual scale. We also made significant progress in maximizing our agencies' performances in activities such as trading, content creation, sports, digital, finance, proprietary tool development and other business-critical capabilities.

Our individual agencies had particularly strong and satisfying years, making major inroads with existing clients while picking up impressive and substantial new business wins along the way. The accomplishments of each of them are outlined in the following pages, where it becomes clear that each has extensive international capabilities and is considered a market leader in virtually every region in which they operate around the globe.

Overall, GroupM was once again ranked No.1 in the world in terms of scale, capabilities, and growth by RECMA, the independent organization that measures those in the media agency sector. One of the reasons behind our sustained success is our stellar new business record. Each of our agencies won major accounts from blue-chip international advertisers in 2007.

One of our agencies – Mediaedge:cia – won three out of the four major US-based industry awards when it was named 2007 Global Media Agency of the Year by Advertising Age and took both Global and US Media Agency of the Year awards from Adweek.

We continue to strive to reshape our business and our future. We have done so each year since the creation of GroupM in 2003. Media agencies are largely a reflection of the sophistication of their client base. We service the most sophisticated and media savvy clients in the world and, therefore, we have to excel at our core competencies. But it cannot stop there. Market leadership dictates that we must be restless in driving innovation and play the role of industry shaper. 2007 was marked by major innovation for GroupM in several key areas that illustrated our ability to meet the challenge of leadership as we reshaped the media industry. GroupM made a series of significant moves designed to take advantage of new business opportunities and to help our media agencies position themselves as marketplace leaders.

The capabilities of digital interactive media and traditional media are beginning to converge. With the rapid moves toward digital delivery of traditional media, GroupM needs to act as a catalyst to ensure the deployment of technology and business practices that will enable addressability, response capability and improved measurement and data flow from all media. We must also insure that we are best positioned to help our clients reach and engage with consumers.

In the US, GroupM was credited with kick-starting the annual upfront negotiations with the major broadcast networks and bringing a new form of negotiating currency to the table - a form of audience measurement dubbed 'C3' that for the first time in North America counted viewers of commercials rather than program audiences. Our move cemented this new currency as the industry standard. These developments led to GroupM North America chief investment officer Rino Scanzoni being named Mediaweek magazine's Media Executive of the Year for 2007.

In the area of addressability and advanced advertising solutions we took an equity stake in Invidi Technologies Corporation, the leader in addressable and targeted advertising solutions for the television industry. Invidi's proprietary technology can target commercials to individual TV set-top boxes, thus bringing the targeting accuracy of the internet to television. Advertisers will be able to target their audience with less waste and greater precision. We will be working to roll out this capability across cable, satellite, and telephone company platforms.

We have invested substantially in developing systems and data structures to further build our capabilities in data collection and mining. Our work in data management and effectiveness analytics is significantly amplified through our collaboration with our colleagues at 24/7 Real Media and at Kantar.

In this rapidly developing digital world, the value of scale goes beyond our ability to develop marketplace knowledge and leverage. The greatest benefit of scale comes from the ability to capture, aggregate and mine the data flow from our significant share of the global communications market and to turn these insights into competitive benefit for our clients and our agencies.

More than anything, GroupM continued to build and expand upon our strong relationships with our media partners, especially in the continually developing digital world. The ability to lead the market and act as catalyst in creating advanced advertising solutions depends on strong and equitable relationships with our media partners.

Our organization and our 16,000 people again provided exceptional performance and value to their clients. The more closely we work with our clients, the better able we are to conceive and advance our mutual strategies. We operate in a sector of the business that provides substantial intellectual challenge. GroupM will continue to provide an environment where our people and our aspirations can flourish while creating greater value for our clients and our stakeholders.