• by Joe Mandese  @mp_joemandese, March 9, 2009

NEW ORLEANS - While it's not likely to shed the kind of blood that a battle among Mafia capos might, a panel billed as a discussion among the media-buying industry's "families" revealed a significant rift in direction among two of its biggest players - GroupM's Irwin Gotlieb and Omnicom's Page Thompson. The panel, the last of the American Association of Advertising Agencies' annual media conference here on Friday, showed a split between Gotlieb and Thompson over how Madison Avenue should treat the network upfront advertising marketplace, and the data agencies use as the currency for making their advertising buys.

Thompson called for a change in the upfront marketplace, asserting it is time to shift to an "ROI currency," while Gotlieb claimed the current currency of CPM-based delivery was more than adequate for Madison Avenue's near-term needs.

While he said it was unlikely that Madison Avenue would actually be able to negotiate 2009-10 upfront advertising deals on the basis of so-called "performance" or ROI metrics, Thompson said agencies should at least start the "conversation" before they "plunk down $9 billion" in the network prime-time upfront again.

Gotlieb countered that an ROI currency is the wrong model for the upfront, because there are far too many variables - things like "creative" - to account for that the networks cannot actually control.

"It's not about bashing the networks," Gotlieb said, adding that the key is really understanding where the "waste" is, and "cutting it out significantly."

"There is a trading currency that is always going to be the subject of negotiation. And I for one, don't like to negotiate that publicly," Gotlieb added, suggesting, "Just because a market currency isn't based on ROI, doesn't mean an agency shouldn't be held accountable for the ROI."

Thompson countered that it is now time for Madison Avenue to at least try to reset the TV marketplace currency, because agencies now seem to have the upper hand, and because performance metrics are increasingly becoming the coin of the realm in digital media buys, and may soon become the industry's standard way of valuing the return on advertising investments.

"Why can't we accelerate this thing," Thompson pleaded, adding that even if agencies don't force the issue now, it ultimately will come home to roost as the traditional upfront haggle is replaced by sophisticated electronic trading systems.

"The currency issue," Thompson added, "in five years, maybe sooner, it will be electronically traded."

Gotlieb seemed to imply that vision is a naïve one, noting that it would actually be against the interests of big agencies and advertisers, because it would weaken the major broadcast networks as suppliers, and would therefore contract the supply of advertising options available to Madison Avenue.

"We have an ecosystem," Gotlieb explained. "One of the things that really troubles me today is that there are media owners that are going out of business. That's not favorable to us, because it alters the supply and demand for marketers."