Recent account shifts and business that could be in jeopardy at major independents-including DeWitt Media and SFM Media Corp., both New York, and Western International Media, Los Angeles-raise serious questions about the momentum and vitality of the independent media services industry.
In the past year, Reebok International consolidated media at brand agency Leo Burnett Co., Chicago, and Nike at brand agency Wieden & Kennedy, Portland, Ore. And last week, MasterCard International initiated a review of its media account at DeWitt.
MasterCard brand agency Ammirati & Puris/Lintas, New York, is competing for that $80 million account along with incumbent DeWitt, SFM, D'Arcy Masius Benton & Bowles' TeleVest unit and GSD&M, Austin, Texas. (There's some speculation about how safe creative is at Ammirati, given the presence of GSD&M, known for its creative prowess, in the review.)
Now some believe Walt Disney Co.'s $300 million account at Western could also be at stake.
Executives close to the account said it is not yet in review, but that an "audit" of Western's media services is being conducted. Some outsiders believe it would behoove the entertainment marketer to at least assess the capabilities of other media resources.
The audit is believed to be a pro forma exercise and not related to a potential conflict that may have arisen when Western was recently acquired by the Interpublic Group of Cos., whose McCann-Erickson agency unit services Columbia Pictures and TriStar Pictures.
Disney's "media is being evaluated, but it's not in review," said an executive close to the account. "They're taking stock as any smart marketer should."
Taking stock is just what many believe is motivating a massive
reassessment and, in some cases, re-engineering of marketers' media
services in the past several years.
"There's a growing recognition that pricing is essentially at parity and
the differential between major agencies and buying services, if any, is
minimal," said Jack Myers, president of Myers Communications, Parsippany,
N.J. "Companies that in the past have made their media decisions based on
cost efficiencies are increasingly looking to make those decisions based
on media effectiveness. And that factors into strategic marketing, media
planning, strategic media buying, as well as cost efficiency."
Mr. Myers said the trend away from independents is less a function of
them losing the business than full-service agencies responding to these
changes and winning it.
"Never underestimate the smarts of people in the advertising
business," said O. Burtch Drake, president-CEO of the American
Association of Advertising Agencies. "The large advertising agencies have
responded effectively to the threat that buying services were posing to
their business. They've strengthened their buying organizations, they've
spun them off and they've strengthened their staffing."
In some cases, Mr. Drake said, full-service agencies have spun off their
media departments into separate profit centers, enabling them to refocus
and reposition their media resources. In other cases, agencies are
developing customized media units within their media departments that
provide a dedicated service for specific advertisers.
The strategies, particularly the latter one, appear to be winning. In the
past several years, General Motors Corp., Chrysler Corp., Nestle, Campbell
Soup Co. and Frito-Lay all have consolidated massive media accounts at
such customized agency units.
"I think we're seeing the world going into two different directions: