Boasting a market cap of $19 billion, WPP Group (ADS) (NASDAQ: WPPGY) focuses on the communications needs of major clients and produces multi-million dollar ad campaigns. To protect its franchise, the company is moving into social networking and video. Its most recent deal is a strategic investment in VideoEgg.VideoEgg is a privately-held company that provides editing tools and an ad network that serves 15 million videos a day. The company has distribution deals with more than 60 online communities, including Time-Warner's (NYSE: TWX) AOL, Tagged, and Bebo.
According to a recent Jupiter Research report, about a quarter of adult Internet users in the US regularly visit social networking sites. Users create profiles, meet new friends, and share videos.
This represents a big opportunity for brand advertisers. "Social networking sites are extremely interesting to brands because the audiences are filled with users seeking membership in particular interests," said Robb Hecht to me in an interview. Hecht operates media consulting firm IMC Strategy Lab.
Will Rich Ross really have a positive impact on Disney's movie operations?
Consumers sick of recession, may spend extra on holidays
Corrections, seasonality and Santa Claus
