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Sara Fischer: New GroupM CEO unveils 5-year plan
By Sara Fischer: GroupM, the largest media buying agency by revenue, is shifting its business to focus on many big data sets instead of a single proprietary one, Brian Lesser told Axios in his first interview since being named global CEO last year. That strategy, which he calls “predictive performance,” will anchor GroupM’s client focus moving forward.
Why it matters: The recently announced mega-merger between Omnicom and IPG underscores the pressure media-buying agencies face in trying to modernize their business to meet the demands of a data-driven advertising world.
Zoom in: Lesser, formerly the CEO of GroupM’s North America division, has been quietly restructuring the company to center around WPP Open, the company’s AI-driven operating system for marketing.
- Open Platform is an AI-driven large marketing model that aggregates data from quintillions of data points across various data sets, Lesser said.
- That “federated” data model, he hopes, will yield stronger targeting results for GroupM’s clients compared to rival agencies that rely mostly on a set of their owned and operated data.
- For example, IPG acquired data broker Axicom in 2018. Omnicom’s acquisition of IPG will give it access to that data set. Publicis acquired another data broker, Epsilon, in 2019.
Zoom out: Reorienting the company around an open data platform is a key part of Lesser’s five-year plan to ensure GroupM remains the most relevant media-buying agency for advertisers looking to maximize efficiency in a digital world. His top priorities to get there include…
- Investing in its Open Platform. WPP invested $300 million in the platform last year, Lesser noted.
- Reskilling its workforce. Lesser doesn’t have plans to reduce GroupM’s workforce but does plan to significantly shift the functions within the company to focus on data analytics and strategy.
- Restructure to focus on innovation. Lesser plans to streamline the number of product brands within the company to provide a simpler structure for clients to navigate GroupM and WPP, and to make it easier for the company’s internal teams to collaborate.
By the numbers: For years, GroupM was the largest media-buying agency globally in terms of dollars spent by its clients on advertising.
- The Omnicom-IPG merger will make GroupM the second-largest ad-buying group globally, according to data from Comvergence, although GroupM will still be the largest in certain markets, like Asia and Europe.
- Over the summer, AdAge reported that Publiclis had recently picked up a large share of new clients, threatening GroupM’s dominance.
- Lesser, in response, pointed to a slew of client wins over the past six months, including Amazon and Johnson & Johnson. It has retained and expanded its business with Unilever, one of the largest advertisers globally, he noted.
The big picture: Most modern ad agencies have aligned their business models in recent years to reflect what’s known as “performance-based” ad buying, which prioritizes sales performance above all.
- That strategy led GroupM to develop and acquire dozens of various agency and product brands that over time became unwieldy and complicated for clients looking to tap into GroupM and WPP’s cross-company tools and expertise.
What’s next: Lesser plans to significantly cut back on the number of product brands within GroupM, and instead unify the company around Open Platform, he said.
- Mindshare, Wavemaker, and EssenceMediacom will remain the three primary client-facing brands within GroupM.
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