The Newest Ad Agencies: Major Media Companies

Marketers Increasingly Bypass Traditional Business Model

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BATAVIA, Ohio ( -- When Procter & Gamble Co. brought hundreds of suppliers to Cincinnati earlier this month for its first "supplier summit," among them were 40 media companies. The message from Chairman-CEO A.G. Lafley, according to one attendee: "We want your ideas, and if we use them, we'll give you a piece of the action."
Procter & Gamble Co. Chairman-CEO A.G. Lafley
Procter & Gamble Co. Chairman-CEO A.G. Lafley

It should be no surprise that media companies are among the partners P&G is looking to tap for ideas that range from new products to new ways of marketing them. Though it may be the largest, it's far from the only marketer soliciting marketing advice from media companies these days.

Companies such as Johnson & Johnson, Kimberly-Clark Corp., Clorox Co., Hewlett-Packard and Verizon also have enlisted media companies lately not just as conduits to reach consumers but also as co-creators of programs to do so. And they sometimes bypass their usual media and creative agencies in the process.

The specter of media companies taking on a new role as strategic partners alongside -- or perhaps even ahead of -- agencies came into clear focus last month during a CMO Roundtable at the Association of National Advertisers annual conference in Orlando, Fla., when chief marketing officers vented some of their displeasure with shops and acknowledged the growing role by media companies.

"If I were an agency, I would be really worried about being disintermediated," said Becky Saeger, CMO of Charles Schwab and new chairman of the ANA. "More and more, agencies are almost in the way sometimes."

Working with established players
"We're going to pilot a number of different relationships where we go direct with media companies," said Gary Elliott, VP-corporate marketing of Hewlett-Packard. He pointed to Meredith Corp. and Time Warner as media companies HP wants to work with directly "because they have relationships with customers and can build that quickly and immediately and give us feedback."

Given the turmoil facing media and marketers, he said, "I think you're seeing media companies, just like marketers, trying to figure out what they need to do, what services they need to offer, how they can offer it efficiently."

Indeed, John Harrobin, senior VP-marketing and digital media for Verizon Communications, said such relationships are becoming the rule rather than the exception for top advertisers.

It's not always about pushing media or creative agencies aside, but more marketers definitely see the advantage of using media companies as more than just aggregators of eyeballs. For example, Kimberly-Clark held a get-together with its media agency, WPP Group's Mindshare, and media companies more than two years ago, yielding ideas that included stitching Viva paper towels into Reader's Digest as a novel way of sampling the product directly.

Tapping consumers
While Clorox Co. relied on Omnicom Group's DDB Worldwide, San Francisco, to handle most of the launch activities around its introduction of Green Works cleaning products earlier this year, it leaned on Meredith's Better Homes and Gardens to help target influencers who were willing to hold house parties to promote the brand.

Clorox already knew from its research and early feedback that many consumers wanted to talk about the new product line, said Jessica Buttimer, marketing director for the brand. And Meredith has a turnkey approach in the form of the house parties that allowed them to do so. She credited that work in part for positive comments that have come in at a rate 10 times higher than for a typical company product launch.

But there doesn't seem to be any real danger, at least at P&G, that media companies will supplant ad agencies. "I'd be shocked," said an executive with a P&G media shop. "It's very outside their culture." He said he expects media shops to be involved in any ultimate dealings between P&G and media companies, though he doesn't discount the possibility of media companies doing some work that creative or digital agencies have done in the past.
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