Stuart Elliott: Mediapalooza or Mediapocalypse?

That39s because with the year not even half over the major media agencies have been engulfed by a tidal wave of account reviews that is being called quotunprecedentedquot and quotseemingly endlessquot It even has a nickname Mediapalooza 2015quotIt39s going to be one long summerquot Lori Hiltz chief executive officer of Havas Media North America said during a panel discussion at a Newsmaker Breakfast last week sponsored by the IRTS FoundationWhen you39re an incumbent it39s never good timing for a review But the onslaught is coming at what is already a crazybusy period for media agencies as they negotiate with broadcast and cable networks in the Upfront market to buy commercial time ahead of the 201516 TV season It39s not unlike remodeling your home in November after you agreed to host Thanksgiving dinner for the extended family and the forecast calls for snowstormsThe total dollar volume of billings involved in the media mayhem is massive estimated at 20 billion to 30 billion The numbers are tough to pin down because many of the reviews involve global assignments and ad spending outside the United States is harder to track But clearly the words attributed to a former Senator named Everett Dirksen apply quotA billion here a billion there and pretty soon you39re talking about real moneyquotThere are two dozen or so media accounts up for grabs in a dozen key categories including automotive beverages financial services food packaged goods and retailing There even are media reviews for marketers involved in media Sony and 21st Century Fox Among the other bluechip names that have put their media agencies on notice are BMW Citi CocaCola General Mills SC Johnson Mondelez International Procter ampamp Gamble Unilever Volkswagen and Wells FargoThe big question of course is why all those media reviews are happening at the same time A few folks attribute the stampede to startling remarks made in March by Jon Mandel a former chief executive officer of MediaCom that rebates or kickbacks have become widespread enough at media agencies to question whether they are discharging their fiduciary duties to clients That further exacerbated worries among marketers the theory goes about a lack of transparency in how their agencies operate which already had been triggered by the rise of programmatic buying and trading desksBrian Wieser senior research analyst at Pivotal Research Group was worried enough about the buzz generated by Mandel39s broadside to downgrade his ratings for four giant advertising companies that own scads of major media agency networks That was in April in a research note last week while citing quotconcerns about transparencyquot as a factor in the skein of reviews he wrote that saving money quotis ultimately top of mind for mostquot marketers quotespecially larger onesquot as they seek cost efficiencies quotwherever possiblequotIn the past Wieser wrote the money that media agencies saved clients through sharp negotiating skills or by cutting fees or commissions would be plowed back into more ad buys But now quotmarketers actually want the savings backquot he said a stance underlined by the increased involvement of procurement departments in media agency selectionsThere39s another motivation for the spate of reviews For many marketers it has been a while since they last reassessed their media agency rosters and the ensuing years have been revolutionary in the media realm Not only are trends such as programmatic buying native advertising and content creation reshaping the way deals are made people are transforming how they consume media by embracing digital mobile social and streaming choices A lot of these reviews are the first since all those changes occurred making the stampede seem less impetuous and more logicalStill for so many reviews to take place at once is a shame because lots of capable talented media agencies won39t be able to compete for accounts they want because they39re too busy scrambling to save accounts they have Here39s a potential solution to that problem Ask the leading agency search consultants to join with the American Association of Advertising Agencies and the Association of National Advertisers and set up some kind of clearinghouse for reviews They could stagger when reviews are scheduled to keep agencies39 staffs from staggering around with exhaustionThe opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of MediaVillage management or associated bloggers Image at top courtesy of freedigitalphotosnetamp160

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Stuart Elliott: Mediapalooza or Mediapocalypse?

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