Google (NSDQ: GOOG) is a massive player in the digital advertising world, but given that this remains only a part of the overall ad market, the Internet giant will not soon pose a real threat to big ad agencies of the world like WPP, Interpublic and Omnicom, according to a report out today from Pivotal Research Group.
The reason for this, they write, is that digital media companies will want to retain their margins, which are “signficantly higher” than those that big agencies get for their services. Pivotal’s analysts also emphasize that agencies still continue to offer a greater degree of independence to brands when advising on how and where to spend ad dollars online.
Google, it seems is just a big fish in a still-small pond: according to ZenithOptimedia, in 2011 digital advertising made up just under 16 percent of total ad spend worldwide, or $73.8 billion. Google last week reported that it made $36.53 billion in advertising revenues, just under half of ZenithOptimedia’s estimated total.
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