Dive Brief:
- Deutsche Telekom is looking into separating its European media operations into groups such as programmatic buying and media intelligence, as reported by The Wall Street Journal.
- Part of the overhaul would involve spending more on digital with Google and Facebook and what the Journal report described as “exerting more control” over the company’s data.
- The motivating force behind changing Deutsche Telekom’s media strategy is a belief its current strategy would lead to stagnation, according to statement from a company document made available to the Wall Street Journal.
Dive Insight:
Right now, the advertising media space is tending toward consolidation, especially on the agency side, but also within marketing departments looking to ensure all marketing functions from traditional media buys like TV and digital efforts are working together across all channels. Deutsche Telekom’s restructuring would bucking this trend if it comes to pass.
The most simple explanation might be that the telecom is planning on moving major marketing spending away from TV to digital. Linear TV is around one-third of Deutsche Telekom’s media spending and the document cited by the Journal outlined a slight decline in that spend along with a sharp decline in other traditional channels like print, radio and out-of-home over the next few years.
Research from Magna found digital advertising spending worldwide is expected to increase 14% this year, and online advertising in Western Europe will get an average lift of 10% to $42 billion.
Deutsche Telekom controls T-Mobile wireless in the U.S. market.