The Times ran a rather remarkable article today about the future of advertising. An excerpt:
It is only a matter of time until nearly all advertisements around the world are digital.
Or so says David W. Kenny, the chairman and chief executive of Digitas, the advertising agency in Boston that was acquired by the Publicis Groupe for $1.3 billion six months ago.
Now Mr. Kenny is reshaping the digital advertising strategy for the entire Publicis worldwide conglomerate, which includes agencies like Saatchi & Saatchi, Leo Burnett and the Starcom MediaVest Group and the global accounts of companies like Procter & Gamble, American Express, Hewlett-Packard and General Motors.
The plan is to build a global digital ad network that uses offshore labor to create thousands of versions of ads. Then, using data about consumers and computer algorithms, the network will decide which advertising message to show at which moment to every person who turns on a computer, cellphone or — eventually — a television.
More simply put, the goal is to transform advertising from mass messages and 30-second commercials that people chat about around the water cooler into personalized messages for each potential customer.
“Our intention with Digitas and Publicis is to build the global platform that everybody uses to match data with advertising messages,” Mr. Kenny said. “There is a massive transformation happening in the way consumers live and the data we have about them, but very few companies have stepped up to it yet.”
Publicis announced last Tuesday an important step in its digital plan: the acquisition of the Communication Central Group, a digital agency in China founded in 1995, for an undisclosed amount. The agency, to be called Digitas Greater China, will give Publicis a foothold in the Chinese advertising market, which analysts within Publicis estimate is growing at about 20 percent a year, much faster than global growth in the market, which hovers around 5 percent a year.
“There’s a chance to invest right now in China, India, Russia and Brazil, which will pay off big over the next five years,” Mr. Kenny said. “These economies are going to boom, and ads there are going to go directly to mobile and directly to the Internet.”
Beyond the growth potential, Publicis executives see these economies as important sources of low-cost labor for a Digitas subsidiary called Prodigious, a digital production unit that works with all agencies in the Publicis Groupe. Prodigious already uses workers in Costa Rica and Ukraine to produce copious footage for companies like G.M.
Greater production capacity is needed, Mr. Kenny says, to make enough clips to be able to move away from mass advertising to personalized ads. He estimates that in the United States, some companies are already running about 4,000 versions of an ad for a single brand, whereas 10 years ago they might have run three to five versions. And he predicts that the number of iterations will grow as technology improves....
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