Which side of the fence do you sit on?

 

Two announcements this week have bemused but perhaps not surprised me. And they reflect the changing nature of the relationship between media agency and media owner, not all of which is healthy.

‘’Twitter reaches biggest ad deal yet’’ read the headline in the FT reporting on the ‘’ non- exclusive’’ yet ‘’preferential’’ global deal that had been reached between Starcom Mediavest and Twitter.(http://www.brandrepublic.com/news/1179499/twitter-signs-major-advertising-deal-publicis-groupe/)

Once you get beyond the headline and read a bit of the detail behind the deal, it appears that it allows Twitter to offer the same ‘’preferential’’ treatment to others . It would have to do so to avoid the fury of most advertisers and agencies . For Twitter, there appears to be no downside. As they prepare for a multi-billion dollar IPO they can tell the market that they have secured vast budgets and commercial endorsement from a leading buyer, on terms that they can offer to anyone else in the market.

Laura Desmond, Starcom’s CEO is, I assume, enjoying the afterglow of being seen to be there first to market ? She is quick to highlight how they have already innovated with Twitter on behalf of certain clients and to talk the big ‘D’ word (Data in case you didn’t work it out). I assume that their experiences to date gives them confidence to ramp up their commitment. This will go a long way in her mind to offsetting the obvious criticism…well obvious to me. And the criticism is this…what is the purpose of cosying up so publicly to a media vendor? Spending money for a specific client, returning a commercial benefit to that client ,and in the process receiving a sensible reward for the agency, is what an agency is meant to do. But now when a Starcom planner recommends Twitter on a plan might the advertiser question whether there may be a motivation to do so beyond their own commercial ends? To fulfil the terms of the deal? Might they rightly worry that having made such a splash about the importance of Twitter that the planner is under pressure to bring them to the planning table even when it may be just a nice to have rather than a must have. Laura Desmond says that Twitter is ‘essential’. If so then that stock is going to FLY! And their stock price won’t be the only price that will be rising.

Starcom’s defence will be that they are getting one step ahead of the competition and thus feeding their clients first with the fruits of Twitter. In the past ,smart advertisers have beaten their competitors through stealth, doing things well without drawing attention to the media they have found is working. Why would a media agency want to draw attention to the benefits unless it is some way to try and make themselves (and not their clients) more sexy? If the announcement of the deal is a piece of marketing for the agency how should the clients of that agency feel?

I said there were two announcements…the second one was Facebook UK’s announcement of the creation of an Advisory Board (http://www.mediaweek.co.uk/News/MostEmailed/1179870/Coke-Tesco-MediaCom-join-Facebook-advisory-board/ ) . I have been aware for some time that this existed in the States because people I know well and respect either have sat or continue to sit on it.

I have already made my view clear to them. If they are doing that in a personal capacity I think it is acceptable as long as their companies feel no compunction to be overly friendly to Facebook by virtue of their participation. If they are representing their company’s interests, why are they doing it? Are they being paid , are they simply flattered , or are they frightened of being left out in the cold? Their response unsurprisingly was that it gives them a bird’s eye view of the cutting edge of digital and social media. Oh ,and face time with the likes of Unilever’s Keith Weed!

If ITV, Channel 4, Associated Newspapers, News International and Global radio all decided tomorrow to follow suit what would media agencies do? Facebook have clearly gone out of their way in the UK to ensure that most Holding Companies have a seat on the Board. So presumably the same agencies would happily commit to help develop all these other important media owners too?I would argue we have as much to gain from improving their offering as we do in helping to develop Facebook. It’s not like Facebook can’t afford to buy good advice. So why are agencies so keen to offer it for free?

It could soon get out of hand as media agencies fight amongst each other to do landmark deals in public and to sit on Advisory Boards. I suspect though that their interest is limited to digitally centric, stock price sensitive announcements.

Facebook’s argument might be that they are responding to criticism that in the past their advertising opportunities have been sub optimal and that they want to consult with the customer to ensure that the maximum impact is generated for advertiser’s investment. Can’t argue with the ambition but surely the solution is to just do their job better, not to co-opt the buy market onto a Board.

My criticism here is not of the media owners. Twitter must be delighted and they are hardly going to bury the news that Starcom seemed so keen to promote.

Facebook are to be congratulated in getting big agency buyers to sit on their side of the fence.

As an agency person I know which side of the fence I intend to remain on.

  • Brian Jacobs

    I agree absolutely with Phil. The line between objectivity and self-interest, clearly key for a media agency would seem in danger of being blurred, if not entirely obliterated. Of course we have to remember that Laura Desmond is American, and thus very used to the sort of crowing over upfront commitments of client money (client money – remember) to TV networks through the US’s antiquated TV upfront trading system.

  • Ivan Clark

    A wise media mind reminded me the other day, a media buyer’s job is to gain intelligence to judge the value of ad spaces, without the media owner knowing. That’s how you make the best buys. 

  • Tom Denford – ID Comms

    This is a really important story and a very articulate perspective, thanks Phil.

    Any media agencies that are securing media inventory in advance of knowing their client’s business challenges are doing 3 things:

    1. They are pre-designing media recommendations, which fulfil the agency’s business objectives more than the client’s, as you explain this poses a risk to competitive advantage for brands in media. 

    2. They are riding rough over the notion of neutrality. Neutrality in media planning in a multi-channel, data driven, consumer lead world is really important because that flexibility allows brands to act more like their consumers, not tied to platforms or ideas. Rigidity in marketing choices is not something we should aspire to. I doubt many CMO’s out there are asking to be tied into platform deals by their agencies. 

    3. The media buyers on the ground in the agencies are becoming media brokers and deal managers. Very little flexibility in choice exists on a day to day basis in market. Too much media inventory and client budget is being committed in advance, before the client has even started to write the brief. 

    I don’t know many marketers that have been lobbying their agencies to develop these practices.
    I will be interested to see whether the first brands to exploit this SMG/Twitter relationship are happy to come forward publicly and explain the rationales.

  • Fred Karno

    Which side of the fence indeed.An interesting article, and point of view, but might this question  be asked of yourself ? You profess to be an agency person who knows which side of the fence you intend to remain on. As co-founder and latterly Chairman of Walker Media -billings estimated by Neilsen at £239m that seems an obvious statement.But since 7th February 2011,a Philip Andrew Georgiadis also holds a full blown directorship and a 5.26% shareholding in Outdoor Plus Ltd, the London based digital Out of Home media owner.

    Assuming this is one and the same person ,if I were a client this potential for a conflict of interest-the agency chairman also sitting on the board and holding shares in a media owner – would be of far greater concern than vainglorius trumpeting of some hollow non-preferential agency deal with Twitter or acceptance of an invite to sit on Facebook’s Advisory Board.

    A primary concern you highlight about the Starcom Twitter association -that of planner objectivity and integrity-might apply equally in this scenario.Try substituting ‘Walker Media’ for ‘Starcom’ and ‘Outdoor Plus’ for ‘Twitter’ in your blog and you can see how an advertiser might question whether there may be a motivation beyond their own commercial ends when an agency planner makes a recommendation in favour of a media owner partly owned by that  agency’s Chairman.

    And regarding your concerns about the creation of a Facebook Advisory Board and the motives of those agency personnel who agree to join it ,then you might reasonably be asked the same questions you raise in your blog about your motivation for joining the board of a media owner.

    As Stuart smith so succinctly put it in a recent blog on a similar subject (http://stuartsmithsblog.com/?s=outdoor+plus);

    “Senior media executives, like Caesar’s wife, should be above suspicion”.

     

    • Philg

      Dear Fred
       
      I refer you to my article where I say ….. ” If they are doing that in a personal capacity I think it is acceptable as long as their companies feel no compunction to be overly friendly to Facebook by virtue of their participation….”

      My personal investment in Outdoor Plus is in the public domain. If you reveal your real identity, Fred I would very happily provide you with further reassurance that this has no bearing on WM’s investment in OP. Or you could ask the planners and buyers at WM whether it has any effect on their decisions. Sadly I suspect you will prefer to remain anonymous which seems to me to suggest you have something to hide?

      Best regards

      Phil G

      • Simon Davis

        I can certainly confirm that Phil’s personal investment has no influence over our planning and buying decisions. “Fred” seems to agree with the principle that media agencies should be neutral and plan without self-interested commercial influence so I would suggest that he (or she) focuses on that, rather than wasting time with smart-arse comments in quasi-Shakespearean prose. “Vainglorius” (sic) indeed…   

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