At the end of 2023, GroupM announced a major reorganization of its management structure in Spain. With what intention?
We are living in a time of change in the sector, and continuing to do things more or less as we have been doing is a guarantee of achieving more or less the same results that we have been achieving. We are in a complex environment, with a lot of movement, where competitors are obviously not going to stand still, with uncertainties and with many opportunities to redraw the sector. Our role has to adapt to this changing world and grow. We have to leave behind the traditional scheme of being the best ally for our clients’ investments and aspire to be the trusted partner that accompanies brands to overcome the challenges posed by an environment of continuous and rapid evolution.
My commitment to GroupM is to try to achieve and make the best decisions that allow us to face the transformation in a faster, more agile, more efficient way, and to better respond to the needs of our clients.
Transparency and traceability of investments are two constants in your arguments. Do they respond to a growing market demand? If so, how has the technological revolution influenced this to be the case?
The reorganization that we are carrying out at GroupM is a commitment to simplify the business model and develop a differential proposal in the industry. Our objective is based on the traceability of media investments, as well as the improvement of advertising planning oriented to the needs and business objectives of our clients. This reorganization is especially relevant at a time when mass audience media, such as Google and Meta, already concentrate almost 50% of advertising investment in Spain and are not subject to external audits and verifications, as traditional media are. . In fact, advertisers traditionally complain about the difficulty of really knowing where they are advertising, especially in the digital sphere, an environment full of networks and intermediaries.
Regarding how the technological revolution has influenced, it is evident that the impact of AI in the advertising and communication sector is a reality. This technology is transforming the way in which companies relate to their customers and is a very powerful tool when it comes to optimizing business strategies.
What are the winning spaces in Spain today in terms of investment? Is it a trend shared with the rest of Europe? And on an international scale? In your opinion, what does it respond to?
According to our global study This Year Next Year, this year there has been global growth in 2023 of up to 5.8%, with a total of $889 billion, excluding the impact of political advertising in the United States.
We estimate that this growth will slow down in 2024 to 5.3%. This will represent an improvement in real terms, adjusted for inflation, but will still be negative real growth. We will return to positive real growth levels in 2025, when our nominal growth rate reaches 5.6% and the IMF’s global inflation expectations are reduced to 4.6%. Growth is expected to remain in the mid-single digits through 2028, with faster growth in emerging markets such as India, Mexico, the Philippines, Poland and South Africa offsetting slower growth in large established markets such as Japan and the United Kingdom. By 2028, we predict advertising revenue will reach $1.2 trillion.
In 2023, 69.4% of advertising revenue will be classified as digital, and that figure is expected to reach 75.5% in 2028. These percentages exclude digital extensions of traditional channels, such as audio streaming, CTV and DOOH, which represent 8.2% of revenue in 2023. Digital, Retail Media and Television will continue to be the three major advertising revenue channels.
I think the industry will find itself in a difficult economic situation over the next year. We all know that the United States is already suffering a bit of a crisis, and when the United States goes through difficult economic times, the rest of the world goes through very difficult economic times.
We have the opportunity to guide our clients through a very changing journey of market disruption… gaining new market shares and emerging unscathed from difficult economic times. And I think that’s an exciting thing when we look at those growth opportunities.
The advantages that digitalization has brought to the advertising business are many and obvious, but what are the disadvantages it entails today? How do you foresee them evolving in the medium term?
It’s not just digitalization. There are words that are already part of the daily life of all companies in all sectors: change, uncertainty, innovation, flexibility… The VUCA (Volatile, Uncertain, Complex and Ambiguous) environment in which we are all currently involved. The important thing, in these moments of change, is to have the customer at the center. The user is the one who dictates the reality of each of the sectors. We tend to underestimate the effect of technology in the long term because we are inundated with the short term. A year ago we were all talking about the metaverse and now it has been forgotten. And it was not so important before nor has it stopped being so now. You will find your place and your role in the transformation and digitalization of the advertising business.
The user has also changed in recent years and, above all, the way of contacting the user. Furthermore, consumers increasingly have less commitment to brands or, at least, more options to choose from. Falling in love with the consumer is increasingly difficult, because it is increasingly difficult to identify them and reach them through a single channel. Technology has been, is and will be, increasingly, key to planning and combining the different channels that you can impact, creating completely personalized strategies.
What does the combination of agency and media center provide to your clients? What is the current role of a media agency, what does the client expect from you?
The role of the agency, between the client and the medium, is a hinge element in the innovation of both. It must help in the transformation of the clients themselves, who have to change their organizational structures and their approach towards innovation. And we must also help advertising and the media, which also have their own transformation projects. We are a backbone. We cannot change only the clients, or only the agencies, or the media.
In a global panorama in which sustainability, at all levels, stands as one of the pending issues, how do you think a media agency can contribute to this sustainability? What can be the social impact of your actions?
GroupM’s purpose as a company is to contribute to improving the world in which we live. We want our activity to have a positive impact and be a lever for the social changes that are taking place, and of which we do not just want to be witnesses. We must be protagonists. We are aware that in this objective we are alongside and alongside the brands, working and promoting values that are now required of all organizations. And on this path of social transformation we are going to work at GroupM trying to help brands and making them participate in our responsibilities with the world where we all live, do business and grow.
Consumers demand truly committed companies that lead major social transformations such as equality, diversity or caring for the planet. To achieve this, we work on a Responsible Investment Framework that is based on five pillars that represent the responsibilities we have acquired with companies, people, society and the planet: brand safety, data ethics, diversity, equity and inclusion (DEI). , responsible journalism and care for the planet. And for each of them we are developing different initiatives.