Mediabrands Moves Toward Performance Comp, Cites Nielsen Deal
The Nielsen agreement "give(s) us the data to align our compensation (with) business outcomes. We're no longer dependent on getting client sales data. We can get this from Nielsen. We have the ability to understand how our media decisions ... what we're planning, what we're buying -- will impact those business outcomes."
The data will be deployed in the U.S., but Mediabrands will look to expand its use internationally later this year.
Mediabrands is the umbrella media unit within Interpublic that includes Initiative ad UM.
Speaking at Interpublic Investor Day on Tuesday, Lupinacci also said that Mediabrands is emphasizing hiring senior talent not from competitive agencies, but from marketers, media owners and those with entrepreneurial experience.
"We feel that's really fueling our product, fueling our ability to deliver outcomes -- so it's very important in the past 24 months that we've really made a shift," Lupinacci said.
Two examples are Eric Bader and Jim Hytner at Initiative and UM, respectively. Bader had worked at MediaVest, but joined Initiative in a top strategy role after two years running his own mobile marketing company. Hytner has headed operations in Europe, Africa and the Middle East at UM, but has extensive experience in UK broadcasting. Both are assuming prominent new roles within Mediabrands as heads of their respective agencies in new "clusters" that include Germany, France and the UK, but also Australia and Japan and the BRIC (Brazil, Russia, India, China).
Lupinacci also said that at a mid-level, Mediabrands is looking for people conversant in buying, planning and strategy and an ability to meld those skills.
Also, Mediabrands is looking to promote diversity at different levels. "We're making a conscious decision to hold ourselves accountable for women and people of color -- making sure we're promoting them, hiring them, advancing them in the organization," Lupinacci said.
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Performance-based compensation for ad agencies and even the execs is a very interesting trend. While there are problems that need to be addressed in any "pay for performance" deal, and those are more complicated in advertising (eg, creative choice), this seems to be a model that we are inevitably moving towards.
And as procurement officers continue to eviscerate media agency margins, agencies have no choice but to start to more actively innovate their business model to improve profitability!