Dive Brief:
- In a research note Friday, Morgan Stanley analysts reported that there is approximately $26 billion in advertising spending up for review this year, noting this year's amount of ad spending up for review is more than the last three years combined.
- According to the analysts, “Customers’ need for agencies to help with the minefields of social, mobile and big data is greater now than ever."
- Major brands like Johnson & Johnson, Unilever, Coca-Cola, and General Mills are contributing to what AdWeek nicknamed Mediapalooza.
Dive Insight:
The reasons for each brand to review their media and ad relationships are as diverse as the brands themselves, but there are some trends tying the reviews together. WPP chairman Philip Lader believes the trend can be attributed to the brands' desire to “optimize their media spending in an increasingly digital media environment.”
For other firms, Unilever for example, the motivation is one of cost reduction. Unilever has been on a quest recently to streamline its agency process -- looking to consolidate the way it handles agency relationships that were previously managed on an individual brand level. That process contributed to the surge in reviews this year.
And an unprecedented amount, Morgan Stanley's analysts noted, “It is not clear if this round will be more deflationary than in the past, but there are more reviews so the net impact on the industry will be lower organic revenue growth."
