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Report by Irwin Gotlieb (below)
Chief executive officer
The year 2009 was an eventful one for GroupM, the parent company to WPP’s media agencies – Maxus, MediaCom, MEC and Mindshare. RECMA, the independent organization that measures media agency sector operations, reported that GroupM held a 32.4% share of the total measured volume among all global media agency networks. The figure indicates that we grew our share of global media by a full share point over the previous year. As such, once again GroupM established itself as the world’s leading global media investment management company with more than $84 billion in worldwide billings (RECMA reported), more than 44% ahead of our closest competitor in billings.
GroupM’s primary goal is to support each of our operating companies as both a parent company and a collaborator in activities that benefit our clients, including trading, content creation, digital communications, new business, finance, proprietary tool development and other critical capabilities.
2009 was definitely a difficult year. It was a difficult year for us because it was a difficult year for our clients. GroupM agencies represent clients that run the gamut of all significant product and service categories. Many of these categories were severely impacted by the global economic downturn that began in 2008 and extended throughout last year, and no category was unaffected. This put us in the position of dealing with the dual challenge of helping our clients through the recession while simultaneously managing our own business to mitigate adverse effects. We had to provide the highest possible level of service and support to our clients, extract greater value for their media investments and do so with improved operational efficiency on our side. It was, to be sure, a delicate balance.
Despite these formidable challenges, each of our agencies scored impressive new business gains in what was the most difficult competitive environment we have ever encountered. These wins, along with a record number of industry awards, are outlined in the individual agency accounts that follow later in this report. Beyond those accomplishments, GroupM also developed new initiatives designed to keep our company at the forefront of the media services business and maintain our global reputation as a pioneering influence throughout our industry.
In difficult economic times, clients place greater emphasis and priority on improved media pricing and the exploitation of opportunities associated with media deflation. GroupM, with our focus on the intelligent application of scale, made further advances in organizing our trading structures to maximize the value that we can deliver to clients. Our advanced marketplace analytics, benchmarking and market simulation modeling informed our trading strategies and provided best-in-class results for our clients.
In the area of online investment, GroupM took a breakthrough, pioneering stance when we became the only major media agency company to change the terms and conditions of online advertising buys to address the issue of data usage rights. This will serve to protect the confidentiality of our agencies’ and clients’ data and ensure that we have influence over the use of such data. GroupM also led a team of WPP companies to develop an industry approach to online self-regulation by creating a standard icon to appear on all behaviorally-targeted advertising that will allow consumers to control what information is shared with advertisers. The initiative has been endorsed by the US Federal Trade Commission as a positive move toward self-regulation.
We were also active in the area of digital research projects. In October 2009, GroupM Search and comScore, Inc., a leader in measuring the digital world, announced the results of the first study ever conducted by comScore looking at the relationship between social media exposure and search behaviors. Conducted in tandem with our social media agency M80, the study, The Influenced: Social Media, Search and the Interplay of Consideration and Consumption, revealed the dramatic correlation that influenced discovery of brands through social media has with search behavior, including more lower-funnel searches and increased paid search click-through-rates (CTR).
GroupM also continued to be a leader in forecasting worldwide advertising spending in both traditional and digital media, issuing several This Year, Next Year forecast reports and periodic updates throughout 2009. Last year we published forecasts on the UK and Russian markets, as well as a worldwide report that received widespread press coverage and was presented at the annual Global Media and Communications Conference, hosted by investment bank UBS in New York. The worldwide report, traditionally issued early in the year, is then updated and released about six to eight months later.
open quoteGroupM also aggressively continues to pursue and advance our investments in new technologies and systems to maintain our history of driving innovation and influencing our industryclose quote
The year was also eventful in the field of branded entertainment and content creation. In October 2009, GroupM Entertainment and Yahoo! announced a partnership to help marketers creatively incorporate their brands into original online programming. GroupM also expanded its international content operations and we now manage content in North America, Europe and Asia. In the US, Mindshare and GroupM Entertainment partnered with Disney ABC to produce In the Motherhood, the first ever network television series to have originated as a branded content internet project produced by a media services agency. GME also co-produced and financed Battle of the Blades for the Canadian Broadcasting Corporation, which became the No.1 rated primetime series to originate in Canada, as well as a new daytime and primetime series with Channel 5 in the UK.
GroupM also aggressively continues to pursue and advance our investments in new technologies and systems to maintain our history of driving innovation and influencing our industry.
We firmly believe it is our responsibility not only to explore but also to lead the market in new directions and catalyze the development of innovative opportunities for our clients. These investments include our 2007 equity stake in Invidi Technologies Corporation, which advanced our role in addressable television advertising, which will set new standards in targeting precision and accountability. We have formed key partnerships to speed deployment and adoption of these technologies. All of these moves reflect our belief that within the next few years all media will be addressable, capable of requests for information (RFIs) and message telescoping (in which viewers can request a longer version of the commercial message), census-level measurable and even transaction-capable. We are taking steps today to ensure that GroupM and its agencies proactively shape the future and maintain leadership in this space.
In 2009, we learned to operate at new levels of efficiency, to deliver greater value to our clients and to exploit technologies to improve the targeting and accountability of our business. Our actions are designed to further GroupM’s position in the media services marketplace for the benefit of our stakeholders, while at the same time expanding on the competitive advantage that we bring to our clients. We will continue to be aggressive in our efforts to realize both of those goals throughout the coming year.