Why Procurement Is Good for Media Agencies, and Why It Isn't

Q&A: Interpublic's Tara Comonte, COO/CFO of Mediabrands

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NEW YORK (AdAge.com) -- As if trying to manage more than $30 billion in global media billings as chief financial officer at Interpublic Group of Cos.' Mediabrands isn't enough of a daily task, Tara Comonte is now adding chief operating officer to her business cards.

Tara Comonte
Tara Comonte
Her new role will have her concentrating on "business process, re-engineering and further automating and driving efficiencies through our core business, focusing primarily on the use of technology and incorporation of technology throughout our entire organization, as well as diversification of revenue streams and service offerings."

At Interpublic since 2005, she first served as CFO at Universal McCann for two years before taking the same role at the newly created Mediabrands in 2007. Ms. Comonte, who today will be the first CFO to be inducted into the American Advertising Federation's Hall of Achievement Under 40, spoke with Ad Age about the challenges facing the industry, the necessary restructuring media agencies must undertake to compete, outdated compensation models and the dreaded "P" word, procurement.

Ad Age: Do media agencies need to restructure to survive in this evolving landscape?

Ms. Comonte: Re-invention is critical. From my point of view, I'm obsessed with re-invention through the use of technology. Execution is something that needs to happen, but does it drive breakthrough business results for our clients? I don't know. If a function within our business doesn't deliver breakthrough business results for our clients, then we should look at some sort of re-invention, whether it be automation through technology or some other sort of consolidated low-cost option.

But some of our re-invention is dependent on media owners and their systems and their processes, and I wish more of it were within our control because we are an impatient organization. And the re-invention and restructuring of some of our business will require other parties to be involved.

Ad Age: What capabilities will an agency looking to restructure/re-invent itself have to have?

Ms. Comonte: If we are going to stay ahead of the game, then we always need to be adding capabilities and talent. For example, as we roll out our enterprise organization globally, we feel search and social media are critical to the Mediabrands offering. These capabilities exist throughout the organization today but social and mobile are areas we will be focusing on hugely in the future.

Ad Age: What are the challenges involved in that type of restructuring?

Ms. Comonte: Speed and investment money.

Ad Age: How do you get clients to see the benefits of these additional services? And are they asking for them?

Ms. Comonte: Clients expect them. It's sometimes tough getting procurement to see the benefit of them. And it's sure as hell tough getting procurement to see the benefit of them enough to get them to pay for them. But not only do clients need these services, they demand them and expect them.

Ad Age: What are the challenges in establishing new compensation models?

Ms. Comonte: There isn't really a challenge in coming up with new compensation models because we have a range of models we embrace here that we actively use with our clients. And some clients are very receptive to new compensation models and others aren't. And typically, where procurement is involved, it's more challenging to sell in a new compensation model because what they want to do is line up a number of suppliers and be able to compare apples to apples. And that's very difficult if businesses are coming in with different models. That's the challenge. Coming up with them isn't.

This is critical for us to address as an industry going into 2010. It's nothing less than farcical that we are paid on how long it takes us to do something. In no way does that align to value from my point of view. We're at a real tipping point in terms of re-invention of our compensation and business models and there are two factors driving that. The first is the ever-fragmenting, increasingly complex digital marketing landscape, which demands investment and innovation and expects results.

And second, we're coming out of the worst economic recession in 100 years, which theoretically dictates economic frugality and cost management. People are quick to assume those two factors are in conflict, whereas to me, they are aligned. Those two factors coming together are our opportunity to re-invent our business model, because the accountability an economic climate such as this demands is a good thing. I'm comfortable with accountability and our ability to deliver and drive value, and that is something in a climate like this that is attractive to our clients. If we drive their business results, it's a win-win.

This to me is a time for change and a time for us as an industry to embrace that change. It's critical that we move away from these legacy models because they are not in any way aligned to delivering at the highest level for our clients. There's nothing wrong with us being held accountable for our performance or value we deliver and that's not what the current models do.

Ad Age: Is procurement adding any value to the process and have they gone too far in their cost-savings measures?

Ms. Comonte: They have only gone as far as we have allowed them to go. We have allowed procurement to compromise our ability to invest and innovate and as an industry that's something we should stop. It's up to us to say "no" sometimes, particularly when it's for the benefit of our clients. I am very comfortable dealing with procurement and it should be a good thing. It's something that drives rigor and accountability and it should hold agencies accountable for results. So the concept is something I support.

Procurement pulling arbitrary numbers out of thin air and having no real understanding of the expected outcomes from a marketing partner is something I don't accept. We need to get better at educating, pushing back and working with procurement. And our clients need to get better at pushing back and working with their own procurement departments. Long term, I see them as a positive. In the short term, we have let them get to a place that is not healthy for us and our clients. And our clients have let them get to a place that is not healthy for us or them as well. But they have an important role to play.

Ad Age: What are the biggest challenges facing the industry today?

Ms. Comonte: Perception of commoditization is our biggest challenge and speed to evolve. Our challenge is not to keep up with the evolving landscape, our challenge is to be ahead of it -- speed to action and speed to strategies and solutions.

Ad Age: How do you address those issues?

Ms. Comonte: The first thing is making sure that we invest in the top talent within our business, because as much as technology and automation are critical in execution and setting up new businesses, we can't be ahead of the game if we don't have the brightest and most strategic thinkers in our organization. We are a people business and we always will be. And we have to invest in the top talent from a diverse range of backgrounds because I don't believe the media business should be hiring media people if we're trying to drive business and marketing solutions. So it continues to come back to talent for me.

Ad Age: How effectively is the Mediabrands model is working?

Ms. Comonte: We are a very nimble organization and have a dynamic management team that aligns on strategy and on what's best for our business and clients, and then executes against that very quickly. We have managed to learn where others have gone wrong. We have looked at some of the other models around our business and managed to take the best of them and leave the worst of them. The management teams across all the brands in the group are all highly aligned in what is best for our clients, the shops and Mediabrands and I think it is working very well.

Ad Age: What is the benefit of this structure to the shops and to the clients?

Ms. Comonte: Mediabrands allows us to leverage central resources in traditional back-office areas like finance, technology or human resources, and other non-client facing and value add functions. By consolidating areas like that, they obviously drive efficiencies and that allows us to re-invest back in the business for future growth and capabilities that benefit our brands. By developing specialist resources that can either operate in isolation or in partnership to drive greater efficiencies for our clients, it allows us a much greater opportunity for growth for our businesses because they're not just operating in silos.

And that to me is the benefit to our clients. You can buy an a la carte Mediabrands offering or go to any one of the agencies and have a team and have the best of all our capabilities created into a specific offer for you. Different clients like to shop in different ways and some want multiple points of contact while others only want one.

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