• by Joe Mandese  @mp_joemandese, September 8, 2008

Following months of high-stakes negotiations, Interpublic is poised to sign a new corporate-level deal to manage the $25 billion-plus in media buys processed by its media and brand agencies. The deal, the first high-profile review of Madison Avenue's media buying systems since Publicis' Starcom MediaVest jilted industry stalwart Donovan Data Systems last year to back upstart Media Bank, is believed to be down to those two data processing adversaries, and Interpublic's decision - expected in the next few weeks - would signal a key vote of confidence for one of them.

While such reviews are not nearly as sexy as media-buying account pitches and are rarely covered by the industry's trade press, there is far more at stake in Interpublic's decision than a new multi-year data processing service contract. Interpublic's decision will send a strong signal to the rest of the ad industry that it believes either Donovan's new iDesk, or Media Bank's built-from-scratch system represents the future of managing media buys in an increasingly digital world.

All eyes will be on Interpublic's decision for a few other reasons. Among other things, some of Interpublic's biggest media clients are leading edge technology firms themselves, including Microsoft and Intel. For another thing, the decision would be the first major deal negotiated by Nick Brien since June when he was named president-CEO of Interpublic's so-called Mediabrands unit, a new corporate-level operation that oversees the holding company's two global media services networks - Universal McCann and Initiative - as well as centralized media marketplace intelligence and research arm Magna, barter group Magna Trading, dedicated Johnson & Johnson unit J3, and specialty media units NSA, OSI and Wahlstrom.

Executives involved in the review have been mum on its details, but what is know is that it began early this year as part of a regular contract renewal review by Interpublic's Universal unit, and has blossomed into a corporate-level deal. Universal, which has been a Donovan shop since it spun off its own in-house media processing division to form what now is MediaPlex, a unit of ValueClick, began working with Donovan's new iDesk system as recently as the American Association of Advertising Agencies media conference in Orlando last March. A top Universal technology executive, in fact, demonstrated an actual media buy on behalf of one of the agency's clients utilizing the new iDesk system in Donovan's hotel suite. The transaction, and online buy executed seamlessly between Donovan's servers and those of Google's DoubleClick unit, took only seconds to implement.

Since then, Universal is believed to have deployed numerous iDesk "desktops" throughout its offices as part of the kicking-the-tires process involved in the Interpublic review.

While other service providers, including MediaPlex, are believed to have participated in the early stages of the review, executives say the decision is now down to Donovan and Media Bank, the latter of which built its digital media processing systems at the encouragement of Publicis' SMG unit, which had been pushing Donovan to do the same. SMG's decision to scrap Donovan in favor of Media Bank led to an industry blowout, and legal action that culminated in a long, drawn-out arbitration case. It's unclear whether that still is pending, but the tensions between the two companies were the talk of the AAAA media conference, and a popular conversation whenever media processing systems are discussed.

SMG, meanwhile, has completely transitioned to Media Bank's systems, which should provide some confidence for Interpublic should it decide to go that route. While legacy systems typically have the advantage in such decisions - mainly because of the fear of the dislocation involved in moving from one processing system to another - Interpublic is believed to be just as interested in market innovation as is SMG.

Processing innovation aside, Media Bank's pitch to Interpublic is believed to mark another industry first: An offer to base its contract not on its agencies' media billings - as has been the industry norm - but to price it based on the number of people actually using the system. That's something Interpublic executives may find more equitable and cost efficient going forward, as media billings increasingly do not translate into agency workflow of labor costs.