• by Tom Siebert , September 28, 2006

It's no longer size and scale that dictate the success of media agencies. It's their ability to creatively outthink the competition, agreed three top media executives Wednesday during Media magazine's Forecast 2007 conference.

"I think we're well past the necessary consolidations to get past the economics of scale," said Daryl Simm, CEO of Omnicom Media Group. "When I think of client needs today, fragmentation is our best friend." Fragmentation, he added, puts a premium on creativity, because multiple platforms and touchpoints demand specialists who can think across a variety of message-delivery options. "Creative ideas are only as good as the ability to implement them. ... Scale brings the ability to bring specialists to companies and allow them to pursue creative ideas and activate that creativity."

Horizon Media's CEO Bill Koenigsberg concurred, noting that there is no longer any real competitive advantage of scale on pricing. Size allows an independent like Horizon access to research and other capabilities that it otherwise wouldn't be able to afford.

David Verklin, Carat CEO for the Americas and Asia, echoed their sentiments, and opined that "diversified marketing services is the next battle" for supremacy in the ad market. He suggested that in these media-ascendant days, companies like Carat or Horizon, with media at the core, were better positioned than Omnicom.

Whether Verklin's opinion of the team rosters on the field is accurate, Omnicom clearly agrees. It launched a new network inside its Diversified Advertising Services group last month called STAR Marketing--which is comprised of eight varied companies covering Interactive, direct, email, telemarketing and media-buying and planning services.

As for consumer-generated content, it's not a threat, Verklin noted--but a significant growth opportunity for a strategic media agency "to drive business forward for a client and open new revenue channels."

Verklin said that savvy agencies are already co-opting CGC, and offered the example of Pepsi using YouTube's Asian parody of The Backstreet Boys, called "The Back Door Boys," for advertising in China.

The three also agreed that the speed of change had made the media business exciting, but also scary. Verklin said everyone is trying to build the "agency of the future." But things are changing so rapidly, "I'm worried we can't build the company in time."

Not that he laments "the bad old days," adding that clients have "never been more open to new ideas."

Still, Simm argued, "communications planning is more complex. It's moved from a linear approach to a more parallel one."

"Every day, day in and day out, you're planning," Koenigsberg said. "It's a 52-week process. Nobody writes a media plan and puts it to bed for the rest of the year."

Koenigsberg also announced that Horizon was on the verge of announcing its purchase of a technology company and a low-power TV station, primarily to test direct-response capabilities, text messaging and other research purposes.