Matthew, Facebook, Publicis Groupe discussed on Bloomberg Surveillance

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What oh nine point seven nine pollen. Lisa. Thank you so much. Karen, Publicis Groupe is setting off alarm bells Madison Avenue adding industries earning season gets underway. The French owner of saatchi-and-saatchi and Leo Burnett worldwide suffered a surprise drop in fourth quarter sales blaming cuts and ad spending. By consumer brands in the US Delta's dig down and see what is going on in the world of advertising, we bring on Matthew blocks, and Matthew is a senior analyst covering all things media for Bloomberg intelligence in London. He joins us from our London studio. Matthew, thank you so much for joining us humor right there on the front lines with the Publicis earnings yesterday. The stock was down fifteen percents on the news. What happened? Yeah. It was pretty Bruce. Who wasn't that? I think is kind of what you mentioned that. You know, they saw almost percentage points slowdown in growth in q four. And as you said, you know, a lot of that pressure is coming from the US market from these kind of consumer goods companies in particular where they have huge exposure there about twenty five percent of their revenues come from that particular group of customers. Those customers have been probably the most aggressive reconfiguring how they engage with the ad agencies. Cussing back aggressively on spend shifting stuff to people like Google and Facebook direct. Even bringing the actively in house and just shows you cow. Short term revenue. These is use his bring it is. There's not much contracted revenue. So you're getting these huge swings courtroom quarter as the industry goes through this really quite seismic shift in how it operates. Matthew. Can you give us a sense of just how much of the advertising staff has been pulled in house at Amazon and Facebook vs still contract it out? This much. Great data, not right now to be honest, but it certainly a growing trend and the ad agencies. Are pushing back on on the way to that impact. But all of the anecdotes that it's happening more and more. I know a lot of personal friends who work in digital props worked for agency. Now, find them working for kind of a big client. If we look at what WPP announced back in December when they had a big stress. She update their response to in housing was a big part of the stress she that they laid out. So the they're trying to respond to it. So it might be quite small now. But it's growing and on the margin is having quite a big impact. So Matthew, I think a lot of people think about Madison Avenue and global ad spending. They think of mad men, Don, Draper, and all the cool creative stuff that people are doing. But the reality is today. It's a lot different in the digital advertising. World you've got Google and Facebook and Amazon and so the question I have for you is what is the future of the global ad agency. Yes. A great question. And I think it's hard to kind of imagine what it's going to be like, but for sure it doesn't look like they look now, I think you have these kind of big groups that cover that creative. And that you just mentioned I think that still going to be really important, but the the craft of being creative addict is changing you you have to come up with these kind of bite sized chunks of creative that you can deliver programmatic over the internet thousands millions of mice to kind of second to different people. See the other end you've got media buying and media planning, which historically has been a huge part of the business accounts for maybe a third of profits. Some of these kind of big Holden groups, and that's been a big air..

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