Facebook favors Publicis in media review

Facebook is favoring Publicis as its main media agency after a six-month review, according to people close to the process. The winner of the review would lead one of the most high-profile accounts in advertising, but would also be thrown under the spotlight as it works with the distressed Facebook brand. The deal is not yet signed; Dentsu and Havas were the other two media agencies in the running, but people close to the review process said Publicis has emerged as the frontrunner. Within the past week, ID Comms, the global consulting firm that is working with Facebook, has been calling advertisers asking for references for Publicis. Havas is supposedly out of the running, according to ad executives who spoke on condition of anonymity because they were not authorized to comment on the discussions Facebook is having with media agencies. But it’s unclear if Facebook is keeping Dentsu as a second option. Facebook, Publicis, Dentsu and Havas all declined to comment. ID Comms did not return a request for comment. “They asked advertising clients if Publicis has hit its savings targets,” one brand marketing executive said. They also asked brands to identify any red flags regarding Publicis. Ad Age had been previously been told that a winner would be picked by the end of October, or early November. Until the deal is signed, it is always possible for Facebook to choose another contender, people familiar with the process said. Subscribe to Ad Age now for the latest industry news and analysis. Facebook’s media review is one of the most high-profile accounts up for grabs this year. However, it is a double-edged sword for whichever agency takes it home, according to advertising insiders. Facebook has been a tough negotiator from the start, requesting the most favorable deal terms possible and demanding strict oversight of its new partners’ business, ad insiders said. Also, as a brand, Facebook has been wounded by an onslaught of negative attention with questions about its management. The company is reportedly even considering a corporate name-change this week. The winning media agency would be responsible for helping Facebook craft any new identity and reshape public opinion. But the agency also would have a powerful new partner, one with some of the most advanced tech in advertising. Facebook is developing products for the “metaverse,” which is the alternate computing world comprised of Web 3.0 initiatives like non-fungible tokens and virtual reality. Facebook owns Instagram, WhatsApp and Oculus VR headsets. The winning media agency would manage how Facebook spends its massive marketing budget, which is close to $1 billion a year. Facebook has also worked with multiple creative advertising ad agencies over the years, including Johannes Leonardo, TBWA, Ogilvy, Wieden+Kennedy, Leo Burnett and Droga5. Facebook used WPP’s Mindshare and Dentsu as media buyers since 2014. WPP dropped out of the agency review over the summer. Tests on real-time buying Facebook has been aggressive during the review, demanding strict deals that could squeeze the winning agency, according to people familiar with the company’s terms. “When Facebook started the review it started with such onerous terms that basically set a rate-per-hour to even participate,” one top agency holding executive said. “What it was like is they came to you and said they would only buy ads if it's 40% off.” Facebook has run tests with the media agencies to see how well they buy digital media in real time, using their programmatic skills, according to ad execs. Facebook was able to see “where every dollar goes, how it’s used, how it’s optimized,” one exec familiar with the tests said. “So, it’s very intense.” Facebook is not “demanding unreasonable” terms, this same exec said. “The things they’re asking for are data security, transparency, rights to audit and good governance.” Facebook is one of the largest sellers of advertising in the world, generating close to $85 billion last year in ad revenue. People close to Facebook have said that the company understands that there needs to be a separation between its ad business and its marketing strategy. Advertising clients will still be wary, however. Publicis, if it wins, should expect queries from other clients asking about whether it promised Facebook any special deals, according to a marketing executive at a top brand. The question will be: “Did you commit to get other brands’ spend growing on Facebook,” the marketer said. Subscribe to Ad Age now for the latest industry news and analysis. The next media agency will also have its hands full because the company is in the middle of a political crisis. Facebook has been the subject of nearly daily reports, stemming from whistleblowers, criticizing mismanagement and the societal harms of social media. Agencies in the review have been concerned about how their own employees could react to the new relationship. One agency in the review recently held a talk with employees where workers asked about the Facebook review, according to a media holdings company executive. “With everything going on around Facebook,” the exec said, “not just one, but many people, asked, ‘why are we involved?’” Contributing: Judann Pollack

Facebook favors Publicis in media review

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