Happy Friday 26.10.2018
Faster, Better, Cheaper
Happy Friday!
Wow what a week! I sometimes worry they’ll be a quiet week in AdTech & I’ll have nothing to send you, but there never is, this week’s newsletter covers four big stories:
Firstly a sophisticated botnet has been uncovered that has been exploiting Google’s Android ecosystem to misappropriate advertising dollars. Next we turn our attention to WPP who have had a bad 7 days, last Friday Omnicom surpassed them as the worlds largest advertising business & yesterday their share price plummeted 15%. We look at what the challenges are & what’s next for the London based giant.
This week has seen yet more stories of advertisers in housing certain media functions with Bayer, T-Mobile & Budweiser all outlining how they are taking more control over their media buying.
Now more than ever it is clear the media industry is being disrupted & business within it will need to change in order to remain relevant, with this in mind we round off the weeks newsletter with Martin Sorrell’s plan for the holding company of the future: Data centric whilst being faster, better & cheaper.
Android’s Fraud Problem
Earlier this week Buzzfeed broke news of an Android ad fraud scheme that allegedly steals millions from advertisers @CraigSilverman had the scoop:
Working with Pixelate the investigation uncovered a sophisticated ad fraud scheme, involving a company called “We Purchase Apps” that buys legitimate Apps from developers then transfers their ownership to shell companies. The behavior of the app’s human users is monitored then used to program a network of bots that mimic real life behavior. Full details here
The sophisticated scheme is said to involve more than 125 Android apps, connected to a network of companies across Europe & the Caribbean. The network of Apps had been installed on Android phones more than 115 million times. It impacted Android rather than iOS, for two reasons 1) Android has a huge user base & 2) because the Google Play store has a less rigorous app review process than Apple’s App Store.
Mobile App inventory is known to be a more challenging environment for fraud than desktop & mobile web, as fraud monitoring tools are currently not as sophisticated in this area. Buyers need to focus on goals aligned to business outcomes & beyond this can download a CSV from Pixelate of bundle IDs that appear to be associated with this challenge, blocking these Bundle IDs may help limit your exposure.
A Bad 7 Days For WPP
Last Friday @marksweney broke the news that Omnicom had surpassed WPP to become the worlds most valuable advertising firm:
So not a good end to last week & they had a disastrous end to this week, at the time of writing their share price plummeted 14% in a single day upon news of falling revenues. Overall returns from their stock are negative 29% in the last year. The business has struggled in the US & their creative shops have struggled in general.
CEO Mark Read said “we have been too slow to adapt, become too complicated & have under invested in core parts of our business”. Perhaps this was a nod to Omnicom who have fared well in the stock markets recently & who sold 19 businesses in Q3 reducing their headcount by 7,000, as well Publicis who are disposing their health care business.
WPP are reacting now though: The business merged Y&R & VML & will sell Kantar. Beyond becoming more focussed WPP plans to better leverage its core assets in pitches; it recently announced its headquarters will oversee any pitch that could generate $20 million in revenue.
I think WPP will be fine, having worked there I can say they are a business full of brilliant talent and leaders, the changes above will not be the last & 2019 will be interesting for all businesses as the industry at large continues to be disrupted by change.
Bayer, Bud & T-Mobile : Taking It In-House
This week Pharma giant Bayer announced it was taking programmatic in-house:
Bayer chose MightyHive to help them due to their track record in this new but burgeoning area. It felt like was a watershed week in the area of in-housing, T-Mobile also announced it is in the first phase of taking certain aspects of media buying back in house & Budweiser brewer AB InBev, who stateside already have a team of in house programmatic specialists announced they will expand this operation to 11 new markets.
Cost is often cited as a driver of taking things in house but these advertisers say they are looking to drive greater effectiveness in marketing & work more directly with platforms, whilst this sounds scary for agencies, it is worth noting that neither Bayer, T-Mobile nor AB InBev plan to abandoned their current media agencies, that said clearly roles are changing & the key question is; How to remain relevant?
Sorrell On How To Win: Faster, Better, Cheaper.
This video below is a fantastic fireside chat between Sir Martin Sorrell & Zach Rogers of AdExchanger. Sorrell say’s his new holding company S4 will focus on Content, Data & Digital Planning & buying:
Clearly being data centric & having the ability to be creative with data is becoming more important than ever, as advertisers pivot away from tactical campaigns into creating always on end-to-end digital experiences for their customers.
He says that to be successful business will also need to be Faster, Better & More Efficient to continue to have a place at the table. Call me crazy but something tells me that the content from this scintillating & occasionally confrontational fireside chat will form the basis of many businesses playbooks in 2019 & beyond.
Okay that’s it from me for now, thank you for reading this far, I really appreciate it. Hopefully you’re not bored of me yet, if you are let me know where I can improve: @SimonJHarris. Feedback is a gift.
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Thanks & have a lovely weekend
Simon