"This is how it's going to be"
Bob Wootton investigates the rumour that one part of a holding group has told media owners to trade their way - or don't trade with them at all.
Two quite similar things have reached my ears recently in the course of my work. The sources are well-informed and hitherto trustworthy, so I strongly suspect kernels of truth in both. Of course, they'll be old hat to anyone involved.
The first concerns 'frenemies' Google and Facebook, who are understood to be leveraging their considerable dominance to drive uptake of their own tech.
It's never a dull week for the two, with a constant stream of new 'products' designed to lure advertisers and hoover up their money. (Should really say 'Dyson' in these days of Brexit, but it hasn't become generic yet).
Now, agencies that use the plethora of third-party tech are apparently being told that they may be 'disadvantaged'. Reason given is that only proprietary stacks can fully mine the richness of their data.
The counterpoint to this is that media owners' own tools invariably show their ROI in a better light. 'Twas ever thus.
In a world many now describe as "Google, Facebook and the remaining 20%", there's also a sense that trading positions could be compromised, suggesting leverage of position to expunge third-party tech players and achieve end-to-end control.
Granted, there are too many of these players, far fewer profitable or clearly differentiated, just a fog of jargon/bullshit from overheated sellers, so there's hardly a customer out there with much real idea of what they're buying into.
Reports from Dmexco suggest the process of squeezing, crashing together or refocusing tech has therefore begun as the owners realise that, as in life, there are too many frogs and too few princes.
But this is happening against a backdrop of increasing disillusionment with online; witness the inevitable backlashes from some big players who bought the "pinpoint targeting, reduce waste" schtick only to discover it didn't drive their business as expected.
There's been no mention of any such approaches direct to clients - yet - but I wonder how they'd react? I'd hope most robustly - caveat emptor.
Meanwhile, something similar seems to be afoot in media agency land. One, part of a holding group but not a trading arm, has allegedly gathered media owners to tell them "This is how it's going to be. Trade our way or don't trade with us".
Although only scuttlebutt at this stage, for the rest of this column I'd like to consider whether there is indeed no smoke without fire.
Such an approach might well extract reluctant compliance from some less well-placed players, but it will surely encounter stiff opposition from stronger ones who know they're vital to a wide variety of advertisers' plans, especially their reach objectives.
This will therefore lead to some pretty distorted media planning - arguably worse yet than current practice where spends are routinely skewed to meet group deals, especially towards year-end.
Taken to extremes, the agency could become a bottom-feeder, a road to ruin and woe betide its clients on the way.
Perhaps this 'initiative' is an imaginative reaction to the percolation of ISBA's new - and very strong - recommended contract terms for clients and agencies? "These are the terms our clients are now asking us to sign, so we need to pass them through to our suppliers..."?
On my previous experience, this might be an explanation were it not simply too soon.
Privately, media owners of all stripes deeply regret having allowed themselves to become overly intermediated by big buying groups"
Ever since the ANA investigation, the spotlight has been pointing relentlessly towards the less visible side of agency operations. And conversations like this are usually all about the invisibles - rebates, value pots and so on.
There's no doubt that extreme measures are being contemplated. At least one network head is said to be wrestling with how to halve headcount over the next two years and Dentsu Aegis CEO Jerry Buhlmann has predicted that media could be 100% programmatic by 2020.
Both see tech as the enabler, though I question the realism of this.
We've seen DMGT and then Guardian Media Group yield to their accountants and declare the rebates they pay media agencies in their published accounts. They won't be the last, so this side of things is gradually becoming more visible.
Privately, media owners of all stripes deeply regret having allowed themselves to become overly intermediated by big buying groups, so I reckon these guys found it liberating to be told to divulge their (financial) rebate pot.
The figures are only aggregates which show what proportion of revenue each media owner returns to agencies to 'buy' its business, but not how it's divided between them.
Nevertheless, I foresee some some interesting conversations as it effectively introduces a benchmark for rebates, so any agency not getting the average or better will surely remonstrate with the media owner. Station average price for rebates, anybody?!
More likely, such publication will force the pace of an evolution which is already well under way - from financial to in-kind rebates. Maybe that's what this is all about.
And finally, who's the perpetrator? Well, if there's any truth to the story, then each of the four holding groups of sufficient scale to be credible and their constituent agencies will know whether it's them or not.
You have to admit that it's tantalising to speculate whether it is the bluff of a market leader or the gall of a challenger.
Silly season end-piece
If everything above serves to confirm just what a tough business media has become, let's finish with something recent that amusingly recalls bygone times.
A senior advertiser executive is quoted talking about how a premium scotch brand is wooing upmarket drinkers by advertising (online, the targetable medium, natch) in London and the southeast.
No shit, Sherlock - we used to do this with telly in the 1970s.
Hopefully a simple PR mistake - a generalist talking about specific craft - and not reflective of a lack of the senior media expertise which any competent large advertiser simply must now have close to hand?
Bob Wootton is principal of Deconstruction