Exclusive extracts from this 65-page-long report:
- Who are the key players?
Multinational full-service advertising groups are the key players of the global advertising industry, although digital pure-players such as Google and Facebook have come to dominate the market thanks to their unmatched scale in online advertising. More generally, the industry is characterised by a great number of players that vary in terms of diversification, degree of vertical integration and geographical reach. Mergers and acquisitions are commonplace, but the industry remains fragmented, with a great number of small, specialised niche agencies or ad technology providers. [...]
Groups analysed in this report include: Alphabet (Google), Facebook, WPP, Omnicom, Publicis, Dentsu, Interpublic Group of Companies (IPG), Alliance Data Systems, JCDecaux and Havas.
- What are the players' strategies?
Leading players' strategies remain strongly focused around expansion, with the objective of enhancing their digital capabilities, service portfolio and scale so as to shape and position themselves for future market trends. Dentsu has perhaps been the most emblematic example of this strategy: since acquiring British media agency Aegis in 2013 to transform itself into a “truly global network”, the company has invested nearly €4bn to complete about 150 acquisitions, doubling its payroll and expanding its presence to 145 countries as of 2018, up from just 27 in 2006. […]
- What are the players' key growth and profitability drivers?
A growing share of digital activities, economies of scale and relatively low fixed costs mean advertising groups strongly benefitted from recent years' revenue growth to increase their profitability. Digital pure-players obviously reported the highest average profitability levels during 2013-2017, whereas among traditional agencies, Dentsu and Omnicom outperformed their peers, the former mostly owing to the positive contribution of external acquisitions, the latter partly thanks to a positive currency effect from a weaker pound. [...]