In addition to being one of the most authoritative industry voices, Madison & Wall founder Brian Wieser knows a thing or two about French chocolate. Let’s call that the sweet stuff (a very worthwhile first few minutes) before we dug into what’s looking sour: ad spend.
Ad Age’s Parker Herren broke down that data, and we caught up with Wieser to get some additional context and discuss what agencies should consider as the year ends.
It’s not all doom and gloom but rather a reality facing all brands, publishers and agencies. Call it a little reset with some nice green shoots to work with.
Below is a breakdown of the key themes.
The State of Ad Spending
Ad spending growth and its expected slowdown toward the end of 2024 are red flags. While some may see this as a cause for concern, Wieser provided a different perspective.
- “It’s like being on the Autobahn going from 120 mph to 90 mph. It’s still fast.”
- Wieser emphasized that while ad spending growth is slowing, it’s still operating at a higher-than-normal pace. This deceleration is not necessarily a sign of decline but a return to a more sustainable growth rate after years of rapid acceleration.
The Impact of GARM’s Dissolution
The Global Alliance for Responsible Media (GARM) recently dissolved, raising concerns about its impact on independent publishers and the broader advertising ecosystem.
- “The end of GARM contributes to a shift favoring walled gardens.”
- Wieser explained that without GARM, the advertising landscape could become more difficult for independent publishers. Walled gardens (large platforms like Google and Facebook that control much of the digital ad inventory) will likely benefit as the lack of universal standards increases friction for smaller publishers.
Opportunities and Challenges for Independent Publishers
What is the future of independent publishers and their ability to grow amidst the dominance of walled gardens?
- “Growth from advertising will be very, very hard to find for large publishers, but there’s still opportunity for smaller players.”
- Wieser noted that while large publishers may struggle to grow through ad revenue, smaller publishers have opportunities to build niche audiences and find new revenue streams, especially through non-advertising-based models such as subscriptions.
- “Consumers are willing to pay for subscriptions, and the narratives around consumers being ‘tapped out’ are not supported by evidence.”
- Consumers are still willing to spend on subscriptions, as evidenced by the $100 billion spent annually on pay-TV services. Independent publishers can tap into this willingness, especially as consumers reconsider traditional media expenses.
Digital Ad Spend and Its Plateau
Digital advertising is the dominant force in the industry. However, Wieser explained that digital spend is reaching a plateau.
- “When you’re already 70% of the industry, it’s hard to keep growing at double digits.”
- With digital ads representing such a significant market share, the rapid growth rates of the past are unsustainable. Digital advertising will likely converge with the overall market’s mid-single-digit growth rate, reflecting a more mature industry.
Social Media’s Role
Social media advertising, a critical component of many agencies’ portfolios, was another key area of focus and one that demanded more explanation about its role.
- “Social media isn’t real—it’s media.”
- Wieser argued that social media platforms are essentially inventory owners with vast amounts of data. While their characteristics distinguish them as “social,” they ultimately function as inventory-based platforms.Â
Advice for Independent Agencies: Good, Bad, and Ugly
A little guidance for independent agencies navigating 2024 from Wieser:
- The Good: “You have opportunities in front of you if you start with your paying closer attention to customers’ needs and continuously look for ways to add value.”
- Wieser emphasized the importance of efficiency and identifying new ways to provide value to clients. This might include offering additional services or expanding into new areas.
- The Bad: “Not doing that.”
- Failure to evolve and seek new revenue streams could spell trouble for agencies. Complacency, especially in a rapidly changing industry, can lead to stagnation.
- The Ugly: “Letting that complacency persist for years.”
- Wieser stressed that the most dangerous thing for any agency is to allow stagnation to become the norm. Agencies must continuously adapt and evolve to stay relevant in an industry constantly in flux.
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Doug Zanger is the founder and editor-in-chief of Indie Agency News. He is also the founder of the Creative Bohemian consultancy, lives in the Pacific Northwest and is insufferable about it.
