Parks Associates Blog

Friday, December 21, 2007

Nielsen and Large Ad Agencies Are Coming Back

For the last five years, Nielsen and big media agencies have been playing a catch-up game. That whatever they did in the digital advertising space always appeared too little or too late. But year-end 2007 may be the time when they can pop open Champagne bottle and celebrate their comeback. For Nielsen, it accomplished a lot in 2007. Earlier in the year, the company finally fulfilled its promise to advertisers made years ago to release TV commercial ratings and DVR household viewing data. It also acquired Telephia during the mid-year to get its foot in the mobile ad measurement business. And on December 19, it announced a partnership with INVIDI to test TV addressable advertising solutions, a new frontier that not very many success stories have been written yet. If the partnership works out well and results impress advertisers, Nielsen might eventually acquire the smaller player. While it’s too early to conclude that Nielsen’s comeback has staying power, these efforts revealed its growth strategy, and the company appears on a right path.

The INVIDI's story does not stop there. One of its latest investors, the WPP group, is the world's largest media buyer and ad agency conglomerate. The WPP’s interest in INVIDI is a clear sign that traditional ad agencies feel the urgency to develop their digital advertising expertise in order to meet the increasing demand from their advertiser customers and fend off potential competitors. Earlier in the summer time, WPP acquired 24/7 Real Media, another digital marketing service vendor. The deal was announced in the midst of a buying spree fostered by large media companies, such as Yahoo’s investment in Right Media, AOL’s Advertising.com acquisition, and Microsoft’s aQuantive snatch, all spurred by Google’s DoubleClick deal back in April. These deals on one hand demonstrate large technology/media companies’ confidence in new media platforms’ ad potential, on the other hand indicate that they do not have a complete package to compete in the digital advertising industry. These acquisitions fill their knowledge holes, and WPP’s moves are no exceptions. Investing in new ad technology companies like INVIDI is a strategic must for WPP and large ad agencies alike, and Parks Associates expects more such deals to follow soon.

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