If big is so beautiful in media buying, why are so many advertisers still seeming so unhappy about the rising cost of TV, and threatening to boycott ITV?
It’s a question I’ve just put to the dynamic duo in charge of the latest mega media merger. The final coming together of J Walter Thompson’s media operation and Ogilvy & Mather’s The Network, to form MindShare, has coincided with the final splitting apart of Cordiant, the old Saatchi & Saatchi empire.
This all-too-neat symmetry raises intriguing questions. Has the WPP media monolith come too late? Can any more value be wrung out of the media process or, when all large advertisers are part of large media groupings, are the advantages nullified?
Older readers may recall that this column claims a proprietorial interest in the subject. In February 1985, I revealed I’d had the temerity to suggest to the top management of Saatchi & Saatchi that it might consider centralising its media buying – a suggestion it promptly, and very keenly, took up.
The initiative lasted just 24 hours – the time it took for Jack Rubins of Dorland to read the story, race round to Charlotte Street, confront the brothers, scupper the scheme and issue a statement for the following day’s Campaign characterising the story as “nonsense” and “irresponsible journalism”.
Three years later Zenith was born, and now – as the Bates Dorland group parts company with Saatchi & Saatchi – all sorts of questions are being raised about its future. Zenith Media Worldwide, which will be owned 50/50 by the two agencies, is looking for global media partners. But even though no one has suggested breaking up Zenith, rivals suggest it could easily go down in size rather than up, as the Cordiant ties are loosened and Bates seeks greater independence.
Though still the UK’s biggest media buyer, Zenith’s new business performance has lagged since the departure of Christine Walker. It remains saddled with the image of a blunt, club-wielding, buying conglomerate, rather than a sharp-thinking, planning operation.
It’s an image that MindShare’s top team – Dominic Proctor, chief operating officer, and Mandy Pooler, UK managing director – are anxious to avoid. They are confident, portraying MindShare as an “intelligent” media operation and a “house of media”, that can offer its clients more than just conventional media muscle. WPP supremo Martin Sorrell describes it as “power” rather than clout.
Proctor admits to some regret that they missed the boat in the early Nineties. “There’s been a market that passed us by for media independents, which have become profitable businesses. But we feel that kind of era has ended.
“This new type of media company will offer a broader, added-value and hopefully more profitable business than the commodity, volume, discount-led trading business that characterised the beginning of the Nineties. We regret not having been part of that, but we appreciate the opportunities of having reset the agenda a little.”
That doesn’t mean the concept of volume had had its day, they say, quoting Sorrell: “Retail is all about location, location, location, media is about volume, volume, volume.”
Proctor says: “What we see as the opportunity is to use the benefit of volume, which is profit, to put back into the business in the research and development sense, to have a value-added proposition. Unless you’re big, you can’t invest in some of the things we intend to invest in.
“We’ll be a broad company, with capability in digital, interactive, sponsorship, the production of broadcast, direct response, research, econometrics, forecasting, and bespoke media-planning techniques.” Some will be in-house, some through joint ventures with other WPP companies such as the Henley Centre, Research International, BMRB, Millward Brown and Ogilvy One.
Proctor and Pooler concede that TMD Carat has done something similar, investing over 1m in its own research for clients. But Pooler maintains their operation will go much further. “Apart from anything else, I think the difference is the pedigree of the companies we can call on in WPP.”
But surely firms like Henley and Millward Brown work with lots of other ad agencies? “Yes, but we can do things with them that they couldn’t do with other people,” says Pooler.
Wouldn’t most clients simply prefer the company to take a lower margin and pass the rest of the savings on? Pooler believes thinking clients will recognise added value. “If you say to clients ‘we can give you a much better fix on return on investment’, they’ll say that’s worth paying for, because they are under pressure – advertisers are feeling the squeeze.”
And that brings us back to my original question: aren’t advertisers just as dissatisfied as they’ve ever been, despite media buyers bringing them together in big groups? Isn’t that why advertisers like McVitie’s are calling for a boycott of ITV?
Pooler doesn’t agree. “I think certain clients are very dissatisfied, I think there are other clients who are very happy. The McVitie’s reaction is rather revealing about what’s happened in its business and its media buying operation. McVitie’s has got almost all its money in ITV. Well, any advertiser who has all its money in ITV nowadays is bound to be feeling the squeeze.
“It’s back to the concept of knowing more about other ways to spend advertising money. Years ago, everyone could see the writing was on the wall – they should have been looking elsewhere, because the audiences clearly were…”
Proctor and Pooler talk a good game. All they have to do now is turn the talk into results.