Interpublic Stays Pat, Keeps Media Processing With Donovan

by Joe Mandese, Nov 14, 2008, 1:29 PM

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In a surprise decision that is likely to trigger some introspection from other major Donovan shops, Interpublic's MediaBrands division is staying pat with long-time data processing provider Donovan Data Systems as the backbone for the media buys processed by its Initiative and Universal McCann units in the U.S. marketplace. The move is surprising, because speculation was that Interpublic, which has some of the biggest technology marketers as its clients - including companies like Microsoft - might seek to go with a new, state-of-the-art data processing system that was designed for handling media buying in the digital age.

"As you can imagine, our evaluation was thorough and we challenged each prospective partner to showcase excellence and innovation in data media management and provided a detailed track record on their integration experience," Interpublic's MediaBrands unit said in an official statement attributed to Greg Smith, chief information officer and president of technology, strategy and development. "Both components were critical in our final decision."

Interpublic executives declined to officially comment further, but the decision was a surprise to a number of Interpublic insiders who had expected to the review to result in a shift to industry newcomer, MediaBank, which made a lot of noise last year when Publicis' Starcom MediaVest Group shifted to it from Donovan. A third finalist in the review was Strata Marketing, a data processor that is now owned by cable TV giant Comcast Corp., and which recently cut a deal with Interpublic client Microsoft to integrate its systems with Microsoft's ad serving technology.

The decision, in fact, came down to an 11th hour call, according to executives familiar with the decision, that would have shifted the contract to MediaBank, leading some to believe that Donovan may have significantly dropped the price it charges to service the Interpublic agencies. If that were the case, it would automatically trigger so-called "favored nation" clauses to readjust the prices Donovan charges other big agency holding companies such as Omnicom and WPP Group. Executives from those agencies were not available for comment.

The MediaBrands assignment does not cover all of Interpublic's estimated $25 billion in annual media buying processing, and MediaBank continues to service some facets for Interpublic agencies. Estimates for the billings involved in the decision range from as little as $7 billion in media buys to as much as $20 billion.

Interpublic declined to elaborate beyond its statement, which noted, "MediaBrands will maintain its current partnership with DDS," Interpublic added in its statement, which did not elaborate on the details of the agreement, but it specifically cited "impressive new solutions, tools and innovative models.

Ever since the break with SMG, Donovan has accelerated the deployment of its digital solution, a system called iDesk, which Interpublic's Universal McCann unit was among the first beta testers for. In fact, during the American Association of Advertising Agencies media conference in Orlando last March, a top UM technology executive demonstrated a live buy of digital media for MediaDailyNews utilizing the iDesk system in a conference hotel suite.

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