• by Joe Mandese  @mp_joemandese, January 21, 2014

Despite the hyper-fragmentation of the media marketplace, five suppliers still represent a critical mass of Madison Avenue's media-buying power. Tellingly, one of the fastest-growing of the ad industry's new “Big 5” is Google, a supplier of search, display, video, mobile and social impressions whose biggest customer is the long tail. Google now takes more than five cents of every ad dollar spent by major ad agencies, according to an analysis of the first full-year data released on the U.S. marketplace by Standard Media Index.

The estimates are significant, because it is the first real portrait of Madison Avenue's supply chain, based on the media buys big agencies actually make. SMI compiles its data directly from the data processing systems used to pay media suppliers by four of the major agency holding companies -- Aegis, Havas, Interpublic and Publicis -- and the findings reveal that Madison Avenue still favors big media suppliers, but that the composition of its supply chain is changing dramatically.

In the past year, spending by the big agencies on Google rose 9% to a 5.2% share of all advertising buys made by the big agencies in 2013. That actually makes Google only the second-fastest growing of the Big 5. CBS grew the most, rising 12% to an 8.6% share of Madison Avenue's media buys.

The only one of the Big 5 to erode is also Madison Avenue's biggest supplier, Comcast Corp. -- which saw its share slide 10% to a 10.5% share of Madison Avenue's market in 2013, due largely to the erosion of its biggest asset, NBC, which declined 18% last year. NBC's decline was due, in part, to comparisons with 2012, when it carried the Olympic Games.

Interestingly, Madison Avenue's new Big 5 represents the full spectrum of media-buying, including major broadcast and cable companies (Comcast, CBS and Walt Disney Co.), digital (Google) and publishing (Time Warner). Combined, the Big 5 suppliers represent 40.5% of Madison Avenue’s media-buying power.

 

“Big 5” Media Supplier -- 2013 Share Of Madison Avenue Spending
	Share	Change
Comcast	10.5%	-10%
Disney	9.9%	+6%
CBS	8.6%	+12%
Time Warner	6.3%	+7%
Google	5.2%	+9%
“Big 5” Total	40.5%
Source: Standard Media Index. Base = Actual media buys processed by Aegis, Havas, Interpubllic, Publicis.