Debunking the Latest Media-Agency Conspiracy Theory

Apparently share shifting of media spend is now a matter of conspiracy in agency reviews involving media companies according to recent reports in Ad Age and MediaPost Allegedly there were share shifting discussions andor commitments required by Disney of their newly appointed media agencies Omnicom and Publicis And like many political conspiracy theories this one is based on secondhand information from parties with amp8220knowledge of the reviewamp8221 That there are denials by the actual parties who won the review doesnamp8217t seem like sufficient evidence to dissuade press speculationI have absolutely no firsthand knowledge of what transpired during the Disney review I know many of the key players involved but I have not spoken with any of them I suppose thatamp8217s not really important when it comes to debunking or promoting conspiracy theories witness the DC follies However over the past 32 years I have participate in countless clientmedia agency reviews and I know very well how the major media agencies negotiate their megabuysThe idea that Disney would require their new agencies to shift media spend to Disney properties as a key stipulation in their agency contracts and that the agencies would agree to this is not realistic Could someone from the Disney team or the review consultant have broached the topic during the review Very possibly Will the new agenciesamp8217 future negotiations with Disney properties receive extra scrutiny and attention from senior agency management Most definitely But let me be clear there was no quid pro quo Certainly there is nothing in the agency contracts about amp8220share shiftingamp8221I say this with certainty for a couple of reasons First while media agencies will negotiate deals their clients must approve them Agencies must provide a rationale for all elements of a media plan and buy The muchtouted amp8220agency pool dealsamp8221 are constructed from the bottom up not dictated from the top down If the Disney properties do not fit a clientamp8217s audience profile or the pricing is not competitive with other media properties then an agency will not convince a client to shift dollars to Disney properties periodSecond given the overhang or hangover from the ANAamp8217s review of media agency buying practices three years ago transparency in all contracts and client dealings is a priority for agencies It would be suicide for an agency to agree to share shift dollars to Disney without first informing and discussing this with their other clientsThird the devil is in the details there are too many variables at play here for an agency to guarantee a shift in media dollars when they are negotiating an upfront deal across 20 or 30 clients What if the Disney properties are underperforming versus their competitors What if the agencyamp8217s client base changes and the audience profile of their new clients no longer align with Disney properties What if the agency increases its media spend by clients that Disney doesnamp8217t want Note Some client deals are so heavily discounted that a Disney network may not want their dollars There is too much downside risk with a guaranteed share shift amp8212 and agencies donamp8217t like riskThere is one scenario whereby an agency might be willing to guarantee a share shift If Disney offered them a amp8220favored nationsamp8221 guarantee on the pricing of their media properties an agency might then justify a share shift in their clientsamp8217 media spend However they would still need client approvalMedia agencies want their clientsamp8217 businesses to succeed because that reflects well on them and in some cases they are compensated based on a clientamp8217s success No doubt Disneyamp8217s new media agencies will work with Disney to help them succeedHere is where it can get a bit murky Will their new agency partners give Disney amp8220extra considerationamp8221 in negotiations Very likely Will those agencies in turn expect amp8220extra considerationamp8221 in their negotiations from Disney Very likely But amp8220extra considerationamp8221 doesnamp8217t necessarily translate into share shifting and this is no different than how previous media companyagency relationships have functionedSo until the actual transcripts of the Disney Media reviews are released to the public or until a whistleblower steps forward debate on the share shifting conspiracy theories will likely continue amp8212 even if the agency contract negotiations were amp8220perfectamp8221Click the social buttons to share this story with your friends and colleaguesThe opinions and points of view expressed in this content are exclusively the views of the author andor subjects and do not necessarily represent the views of MediaVillagecomMyersBizNet Inc management or associated writers

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Debunking the Latest Media-Agency Conspiracy Theory

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Steve Grubbs

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