New York: It is only a matter of time until nearly all advertisements around the world are digital.
Or so says David W. Kenny, chairman and chief executive of Digitas, a Boston-based advertising agency that was acquired by Publicis Groupe for $1.3 billion six months ago.
Now Kenny is reshaping the digital advertising strategy for the entire Publicis worldwide conglomerate, which includes agencies such as Saatchi and Saatchi, Leo Burnett and the Starcom MediaVest Group and the global accounts of companies like Procter and Gamble, American Express, Hewlett-Packard and General Motors.
The plan is to build a global digital ad network that uses offshore labour to create thousands of versions of ads. Then, using data about consumers and computer algorithms, the network will decide which message to show at which
moment to every person who turns on a computer, cellphone or a television.
Changing times: Publicis chief executive Maurice Levy
The goal is to transform advertising from mass messages and 30-second commercials into personalized messages for potential customer.
“Our intention with Digitas and Publicis is to build the global platform that everybody uses to match data with advertising messages,” Kenny said. “There is a massive transformation happening in the way consumers live and the data we have about them, but very few companies have stepped up to it yet.”
Publicis on 31 July announced the acquisition of the Communication Central Group, a digital agency in China. The agency, to be called Digitas Greater China, will give Publicis a foothold in the Chinese advertising market, which analysts within Publicis estimate is growing at about 20% a year, much faster than the global growth of around 5%.
“There’s a chance to invest right now in China, India, Russia and Brazil, which will pay off big over the next five years,” Kenny said. “These economies are going to boom, and ads there are going to go directly to mobile and directly to the Internet.”
Publicis executives also see these economies as important sources of low-cost labour for Digitas subsidiary Prodigious, a digital production unit that works with all agencies in Publicis. Prodigious already uses workers in Costa Rica and Ukraine to produce copious footage for companies such as GM.
Greater production capacity is needed, Kenny says, to make enough clips to be able to move away from mass advertising to personalized ads. He estimates that in the US, some companies are already running about 4,000 versions of an ad for a single brand, whereas 10 years ago they might have run three to five versions.
The Publicis digital plan can be viewed as a reaction to the changes in how consumers live, but it is also a response to competition among Google, Yahoo and Microsoft. Publicis is trying to carve out a niche as a middleman between those online giants and the consumer brand companies that buy ads.
“How do we see Google, Yahoo and Microsoft? It’s important to see that our industry is changing and the borders are blurring, so it’s clear the three of those companies will have a huge share of revenues which will come from advertising,” said Maurice Levy, chairman and CEO of Publicis. “But they will have to make a choice between being a medium or being an ad agency, and I believe that their interest will be to be a medium. We will partner with them as we do partner with CBS, ABC, Time Warner or any other media group.”
Levy says he does not plan to compete with Google - rather, he wants Google to need Publicis. Levy is widely credited with the transformation of Publicis from a small French ad company into one of the world’s largest advertising holding companies, competing with the WPP Group, Omnicom and the Interpublic Group. His stated goal is to stir up the digital sea before he retires in 2010.