VALENCIA (AdAge.com) -- The tenuous relationship between media agencies and media owners reared its head during the day's last session at the 2009 Festival of Media as the heads of some of the largest media agencies gathered here discussed how everything from the recession to social media has affected their operations.
During the "Global CEO Spotlight" panel, the moderator, Advertising Age Editor Jonah Bloom, playing the role of a media owner, took the agencies to task for complicating buys due to their complex internal structure. "We came with a multiplatform [ad buy] and it was an integrated-marketing solution. And then the [agency's] TV guy didn't want to know about parts of it, or he wasn't talking to the digital guy and the digital guy doesn't even know who lives in the TV department." His monologue drew applause from the media owners in the audience.
Nick Brien, president-CEO of Interpublic Group of Cos.' Mediabrands, said media agencies and media owners need to take part in sharing talent across their organizations to reduce the miscommunication. He said Interpublic's Universal McCann has taken steps to bridge the gap between agency and owner by bringing in Jacki Kelley, formerly of Martha Stewart Living Omnimedia, to run the agency's North American division.
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"That was not by chance but by design," Mr. Brien said. "Universal McCann has a commitment to kick-start the focus on the assets and capabilities of media owners in a more strategic way. Our business comes down to three things: people, process and technology. We need smarter, different people trained differently. ... So by design we are looking at all of our businesses and asking, 'How can we formally establish relationships with our media owner brethren?'"
The recession has obviously caused agencies to step back and assess their internal structures as well. Jack Klues, managing partner at Publicis Groupe's Vivaki, said his agency often has two different groups doing the same type of work and is looking for ways to "standardize and homogenize" that process to eliminate those redundancies.
"The recession has caused us to focus on what's important to clients and the organization and what isn't," Mr. Klues said. "That fosters conversation between the two of us and helps determine what work can be eliminated. We're in a race to standardize things."
Dominic Proctor, CEO of WPP's Mindshare Worldwide, said other types of standardization could be taking place across media agencies, such as the "way we transact things. These are the growing pains of the industry that were happening anyway but the recession has sped it up."
Social media has also made an impact on media agencies.
Can't afford to, can't afford not to
"The number of people and hours we invest in [social media] is huge," Mainardo de Nardis, the new global CEO of Omnicom Group's OMD Global, said. "The revenue is small but we can't afford not to do it but can't afford to do it. There's an imbalance and we have to find a way to rebalance it."
The other hot-button topic always on the minds of media agency folk -- margins -- was also discussed.
Mr. Brien said if media agencies can get to a level of accountability and have a "candid" opportunity to examine all elements of a campaign and determine the contribution the agency made, "why is not reasonable and certainly possible to share in the commercial upside? That's one of the biggest places we can go."
He said the recession has forced his clients further down the sales funnel, as they have become more focused on the point of purchase by trying to determine how customers are behaving when they are in the store.
"[Clients'] equity is strong and can afford to dial down at least 50% [of ad spending] for the next 12 months on the brand as they get through this challenge," he said. "It's a mix change, it's not about spending less."
But what will the agency world look like on the other side of the recession? Mr. de Nardis doesn't believe agencies will come out of this the same way they went in, and one result will be a different array of decision makers. "We will have different players around the table," Mr. de Nardis said.
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