Digital (including mobile) on the move

In its latest This Year, Next Year report, WPP’s media investment management arm GroupM declared that “the mobile advertising floodgates are open”.

The metaphor is spot on. In the UK in 2013, mobile advertising spend doubled as a proportion of the total digital advertising investment managed by GroupM.

Half of Facebook’s global advertising revenue was mobile in the third quarter of 2013, up from 14% in the same period in 2012. GroupM estimates that Twitter’s advertising is already 70% mobile in the UK. A quarter of YouTube’s traffic is mobile and Google predicts 80% of all its traffic will eventually come from mobile.

Percentage of time spent in media US vs China *

Percentage of time spent in media US vs China:- Print: US - 6%, China - 11%. Radio: US - 14%, China - 5%. TV: US - 42%, China - 29%. Internet: US - 26%, China - 33%. Mobile: US - 12%, China - 22%


  • US
  • China

Source: KPCB

* 2012 data.


The faster-growth markets provide fascinating intimations of what’s to come globally in mobile. In China, mobile has already overtaken the desktop as the primary means of accessing the web, with 460 million internet users accessing the web via mobile devices.

The faster-growth markets provide fascinating intimations of what's to come globally in mobile

Line graph representing

In 2013, Chinese smartphone subscribers grew to an estimated 350 million. China Mobile, which tops the top 100 Chinese brands list, with a brand value of $61 billion, has 770 million subscribers. That number is expanding by five million a month.

Mobile, finally, is on the up and up.

Friendlier frienemies

Many years ago we started calling Google a ‘frienemy’. Not everyone agrees with me, but I see it as a friendlier frienemy these days. We invested more than $2.5 billion of clients’ money with it last year. Google is now ranked inside the top 50 on WPP’s client list, making our relationship even more symbiotic.

Google will become ever more powerful, extending its reach into more and more areas. It is already the industry leader in two new areas of disruptive technology: wearable computing and driverless cars. Its investment in health is also fascinating.

And every time we do a search, we improve the quality and predictive ability of Google's core product, and make it stronger still, in line with its intelligent search strategy.

Content-ment?

Historically, there have been restrictions on advertisers developing material for television, especially in the West. There are fewer such restrictions on the creation of online editorial content for clients, presenting opportunities.

New media owners such as Vice offer different and original ways to reach audiences unmoved by traditional display and television creative. WPP owns a minority stake in Vice, which produces travel, sport, entertainment, food, business and news material from offices in Brooklyn, New York, London and Venice Beach, California. Enter its offices at midnight on a Saturday and you will see young journalists putting together content.

WPP has also invested in Media Rights Capital, which distributes House Of Cards on Netflix, and Fullscreen, a company run by George Strompolos, formely of Google, YouTube, CNET and WIRED , which manages 100 channels on YouTube.

This is the beginning. Native advertising, sponsored content, branded content – call it what you will – are all a response to the same basic need: to use our talent to evolve fresh, measurable ways to help position and sell clients’ goods and services.

Changing times

Despite the ever-greater expansion of digital and interactive media, apparent discontinuities remain. In a revealing presentation, respected trend-watcher Mary Meeker suggested that spending on traditional media is disproportionately high compared to the amount of time consumers devote to them.

Media time spent vs ad spend US 2012

% of time spent in media vs % of advertising spending

Bar chart representing Media time spent vs ad spend US 2012


  • Time spent
  • Advertising spend

Source: KPCB 2013

For example, our industry in the US invested 23% of the media book on newspapers and magazines in 2012, yet consumers spent only 6% of their media time on them. The same consumers spent 38% of their time online and on mobile, where the industry invested 25%. This is likely to change.

Of course it’s not as simple an equation as all that. What counts for advertisers (and what our media investment management business is focused on) is value and effectiveness, rather than how much time consumers spend with each form of media.

Free-to air-television, for example, especially in developed markets, is as important as ever, even if viewers are using a tablet or mobile at the same time as sitting in front of a bigger screen. We believe television in its old forms and in its new forms in developed markets will continue to grow and remain stable at around 40%.

The discreet charm of the ‘old’ media isn’t necessarily lost on new media magnates. Not least Amazon founder Jeff Bezos, who bought the Washington Post in August last year for $250 million. It was an era-defining moment, ending four generations of Graham family ownership. We’ll have to see how the Washington Kindle fares and whether an Amazon treatment can turn analogue dimes into more than digital pennies.

Support for newspapers is to be applauded. The depth, expertise and high journalistic standards of traditional media cannot be matched, so far, by the new media owners and aggregators.

Losing traditional media would be a blow to commerce, culture and democracy. So in the absence of a whole herd of billionaire backers, three things have to happen. First, consumers will have to get used to paywalls for the content they value. Second, there has to be more consolidation. And third, as others such as the Guardian ’s Alan Rusbridger have argued, governments will have to consider state subsidies for quality journalism.

Losing traditional media would be a blow to commerce, culture and democracy

The prognosis is different depending on where you are sitting. In mature markets, traditional media is shrinking but digital continues to prosper. In faster-growth markets, the BRICs and Next 11, both traditional and digital media are blooming.

Growth of media in major markets 2009-2014 %

Internet 2009 2010 2011 2012 2013f 2014f
North America 11.3 11.6 12.4 10.0 9.3 9.0
Latin America 27.1 36.5 32.5 22.5 18.8 19.5
Western Europe 8.2 17.4 12.6 9.8 10.7 9.5
Central & Eastern Europe 8.9 48.5 34.5 23.4 20.1 16.9
Asia Pacific (all) 8.2 23.1 24.6 25.1 23.1 21.9
North Asia1 17.9 45.1 47.2 38.7 32.7 30.9
ASEAN2 36.9 47.2 7.7 60.0 59.1 37.0
Middle East & Africa 56.8 9.0 5.9 56.3 6.8 3.3
World 9.9 17.8 16.9 15.6 14.8 14.1
Television 2009 2010 2011 2012 2013f 2014f
North America -6.1 4.4 3.6 4.1 1.0 2.6
Latin America 4.8 20.6 6.1 9.1 8.1 11.6
Western Europe -11.1 8.6 0.3 -6.0 -1.0 2.0
Central & Eastern Europe -17.9 11.5 12.4 3.8 6.1 7.1
Asia Pacific (all) 0.6 8.1 7.8 5.7 4.1 3.7
North Asia1 6.6 9.3 11.2 6.0 3.0 3.5
ASEAN2 10.8 16.9 12.7 14.2 9.6 7.3
Middle East & Africa 12.4 22.4 6.6 15.1 9.4 5.9
World -4.2 8.3 5.1 3.9 2.9 4.1
Outdoor 2009 2010 2011 2012 2013f 2014f
North America -4.6 1.4 2.7 3.5 2.8 2.7
Latin America 3.9 13.4 12.3 11.3 6.9 9.8
Western Europe -9.2 2.1 -2.6 -5.2 -0.8 0.8
Central & Eastern Europe -33.3 9.3 10.2 5.4 6.4 6.9
Asia Pacific (all) -8.2 7.5 10.9 12.2 6.4 6.8
North Asia1 -1.8 17.2 23.8 18.4 7.7 9.8
ASEAN2 4.3 18.2 9.1 17.7 4.5 2.2
Middle East & Africa -1.7 19.8 43.6 22.2 -3.0 4.2
World -9.6 5.7 6.9 6.6 4.0 5.1
Magazines 2009 2010 2011 2012 2013f 2014f
North America -15.0 -3.3 -0.1 1.9 0.0 0.9
Latin America -18.6 10.6 6.9 -1.6 -5.0 -1.4
Western Europe -22.4 -2.4 -5.2 -11.3 -8.2 -3.8
Central & Eastern Europe -38.5 -1.5 2.0 -3.0 -7.8 -4.2
Asia Pacific (all) -16.1 2.1 1.4 0.8 -1.5 -1.5
North Asia1 -1.4 17.4 13.1 5.5 -1.6 0.1
ASEAN2 -4.6 11.6 4.2 -1.9 -4.7 -4.0
Middle East & Africa -5.0 5.4 2.9 -11.4 5.3 4.4
World -18.3 -1.8 -1.0 -2.3 -2.6 -0.7
Radio 2009 2010 2011 2012 2013f 2014f
North America -7.6 -2.5 2.3 4.7 0.1 1.1
Latin America 8.1 11.3 15.5 -6.7 2.9 -0.3
Western Europe -9.1 1.1 -0.5 -3.6 -2.4 0.8
Central & Eastern Europe -22.3 4.8 7.0 9.5 6.7 8.7
Asia Pacific (all) -0.4 11.3 3.1 4.3 3.2 2.3
North Asia1 8.3 23.8 7.9 7.0 2.3 3.6
ASEAN2 11.9 15.7 1.8 9.2 7.4 2.7
Middle East & Africa 13.6 24.7 16.6 35.7 6.9 11.6
World -5.2 3.7 3.8 3.3 1.2 2.2
Cinema 2009 2010 2011 2012 2013f 2014f
North America -4.8 10.5 0.0 2.4 2.3 0.0
Latin America -8.8 -5.1 25.1 10.2 14.9 14.2
Western Europe -7.0 6.0 -0.4 3.0 -4.4 4.0
Central & Eastern Europe -21.2 25.8 12.1 10.3 11.5 9.4
Asia Pacific (all) 1.6 15.8 9.2 16.5 7.6 6.4
North Asia1 0.0 5.0 3.9 0.0 4.2 4.0
ASEAN2 10.3 18.1 15.3 10.8 -1.2 3.4
Middle East & Africa -17.2 8.0 42.7 -1.2 8.4 -4.2
World -7.2 8.1 6.3 6.6 2.1 5.5
Newspapers 2009 2010 2011 2012 2013f 2014f

Source: GroupM

f: Forecast.

1 China, Hong Kong, South Korea, Taiwan.

2 Indonesia, Malaysia, the Philippines, Singapore, Thailand, Vietnam.

(Figures rounded up.)

North America -17.9 -8.4 -6.8 -4.8 -1.8 -1.9
Latin America -1.8 15.2 4.8 7.9 -1.2 3.3
Western Europe -15.7 -2.4 -3.5 -9.8 -8.9 -4.7
Central & Eastern Europe -26.0 2.6 1.6 -0.2 -6.0 -0.9
Asia Pacific (all) -8.2 9.3 0.2 -2.3 -2.3 -0.7
North Asia1 1.9 17.2 4.1 -4.1 -3.7 -0.5
ASEAN2 -0.3 20.0 6.6 1.1 2.7 2.5
Middle East & Africa -3.6 -1.1 -1.0 -4.3 -4.2 1.3
World -13.7 -0.1 -2.7 -4.8 -4.2 -1.8

Chapter 7 of 13

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