OMD bags UK government’s media account
Omnicom Media Group’s Manning Gottlieb OMD has successfully bagged the media account worth £140 million of the UK govt, post a multi-agency pitch. The pitch featured Group M, Publicis Media and the incumbent Carat that has been handling the account since 2014. Dentsu Aegis Network’s Carat’s contract ends later this year. According to media reports, the UK government figures in the top 10 spenders list, which features brands like Sky, P & G and BT.
The process was initiated in October, 2017, with a big focus on creating transparency in the digital media supply chain.
Apparently, the cabinet office was taking a lot of precautions to conduct a fair-and-square pitch since its previous 2014 media review decision was challenged by WPP in the high court. The office used ISBA’s new and tougher media agency framework contract in its negotiations with agency groups. It was also one of the first UK advertisers to stop its ads on YouTube when questions on the platform’s brand safety arose.
The Government Service Communication’s (professional body for people working in communication roles across government) media buying framework clearly stated, “We expect the agency to demonstrate how they will evolve and adapt within a changing media landscape. We require our data to be treated separately from other clients in a programmatic environment (separate seat) to avoid any data security risks and issues with transparency compromised due to government data being included with other clients data.”
Digital is the preferred medium for luxury advertising
Zenith’s Luxury Advertising Expenditure Forecasts 2018 says that 33% of luxury advertising will be digital this year, growing by $886 million between 2017 and 2019 — up from 30% in 2017. TV advertising will grow $27 million, with cinema and radio falling far behind, according to the report. By 2019, digital advertising will account for 35% of total luxury ad spend. Luxury advertising in newspapers, magazines and outdoor advertising will shrink by $305 million in total, with a net increase of $631 million in luxury ad spends between 2017 and 2019.
The countries leading the list of largest luxury markets include the US and China, with brands spending $5.2 billion and $2.1 billion, respectively, in 2017. China, meanwhile, also leads in terms of digital advertising, accounting for 53% of domestic luxury ad spends in 2017. By 2019, this figure is expected to touch 70%. The report asserts that total luxury ad spends would rise 2.4% in 2018 and 2.8% in 2019, below the growth rate of advertising in general 55% of high luxury ad spends (watches, jewellery, fashion and accessories) to opt for magazines in 2019. Broad luxury brands would spend 41% of their budgets on television in 2017, more than any other medium.
However, the report informs that luxury brands have been slower to adopt digital advertising than other categories. Across 23 markets surveyed in the report, advertisers across various categories spent 39% of their budgets on digital advertising in 2017, while luxury advertisers spending only 30%.
Jonathan Barnard, head of forecasting, Zenith said, “After a relatively slow start, luxury advertisers are now committing to the digital future, led by luxury hospitality brands (high-end hotels, restaurants, bars and clubs). Luxury brands face unique challenges online, such as the need to maintain exclusive brand values while communicating with potential customers at scale. By using personalised digital communications and high-quality e-commerce experiences, luxury brands can generate new sales while preserving their exclusive appeal.”
Australian advertising boards to merge
With an aim to achieve better governance insight, Australian Association of National Advertisers (AANA) and the Advertising Standards Bureau (ASB) have decided to merge. The single Board, to be elected in November, will include advertisers, various members of the Australian advertising industry and representatives from the wider community.
“These changes will reduce complexity, cost and most importantly, will have no impact whatsoever on the independence and transparency of Ad Standards complaints and adjudication processes, which will continue to be administered independently of the AANA secretariat, by its own chief executive and staff,” informed AANA’s chair, Matt Tipper. The organisation further said that this was the beginning of future-proofing the self-regulatory system in the market.
Tipper noted that the increasing migration of advertising to the digital space has led to more advertising content and ‘hence increased the workload and operating costs of ad standards’.
“At the same time, there is a growing trend for advertisers to pay major publishers and digital platforms directly and that has the potential to significantly lessen the funding for self-regulation through the current collection mechanism,” he said.
He asserted that self-regulation is a global challenge and thus, AANA will actively engage with its counterparts overseas to help develop alternative funding models, adding that while it is a long-term project, ‘given the future media landscape it is only sensible to commence formal discussions now’.
AANA had set-up the current Australian self-regulatory system in 1998 and works to protect the interests of those businesses that contribute to an estimated advertising spend of more than $15 billion per annum.
Vodafone’s Vittorio Colao to step down
Vodafone Group’s chief executive officer Vittorio Colao is all set to leave the company after a 10 year-stint. It was in 1996 that he joined Omnitel Pronto Italia, which subsequently became Vodafone Italy, and was appointed chief executive in 1999. In 2004, he left Vodafone to join RCS MediaGroup, an Italian publishing company, where he was chief executive until he rejoined Vodafone as CEO, Europe. Nick Read, 53, will succeed Colao ,while Margherita Della Valle will be elevated as CFO.
Will ‘thorough reorganisation’ help Tesla?
While riding high on hope and wishes, Tesla seems to have been stuck in deep waters. The company posted a record net loss of $709.6 million in the first quarter of 2018. It also lost about $745.3 million in cash while struggling to bring out large numbers of its Model 3 mass-market electric sedan. But it seems that its CEO, Elon Musk has a plan to bring Tesla back on track — by reorganising the company to make ‘money and have positive cash flow in the third quarter’. In an email addressed to the company’s employees, he said that the company was working towards “flattening the management structure to improve communication”, combining functions and trimming activities “not vital to the success of our mission” in the reorganisation.
“The number of sort of third-party contracting companies that we are using has really gotten out of control, so we are going to scrub the barnacles on that front. It is pretty crazy. We have got barnacles on barnacles. So there is going to be a lot of barnacle removal,” said Musk adding that Tesla had made a mistake by adding too much automation too quickly at its factory. He, however, further added that the company will continue to hire rapidly across critical hourly and salaried positions to support its Model 3 production and future product development. Meanwhile, Doug Field, Tesla’s senior VP, engineering, stepped down from his job. The news comes when the company is struggling to hit the manufacturing target of 5,000 a week for Model 3. Musk had taken control of production responsibility from him earlier this year. Matthew Schwall, Tesla’s director of field performance engineering, also moved out. When Model 3’s production began last year, Musk had promised to build 20,000 units in December. Instead, the company managed to get out only 2,425 units during the entire fourth quarter.
In its eight years as a public company, Tesla has, thus far, posted only two profitable quarters.
— Compiled by Ananya Saha