• by Jack Feuer , August 11, 2009

Los Angeles is the second-largest market in America, but its ad community has a very small-town vibe. Mostly, locals rule. So all L.A. agencies compete for tiny pieces of homegrown business with the same ferocity that Sven's House O' Advertising pursues a furniture store in Fargo. And mostly, locals win.

But there's a Southern California account in play right now that could cast a far wider-and ominous-shadow for media agencies everywhere.

Local client Honda Motorcycles' creative and media review is relatively small at $20 million in estimated billings, which means actual spend is somewhere between a cheese and bean burrito and a mocha latte. But its symbolic value could be huge.

If this competition were a canary, it would be ass-up in the coal mine.

The review drew small shops and the local offices of the big media and creative agencies. Normally, the smart money would bet on a team-up of one of the small players with personal ties to the client and the local office of one of the big media players. Or, that the client would divide its business and choose a creative shop and a media partner. Those are time-tested paths to new business in L.A., where Western International Media launched the concept of independent media services almost 40 years ago.

But except for an "active lifestyle" independent in Milwaukee and incumbent Dailey & Associates (probably the usual mercy pass to the finals), the finalists are all big, "full-service" shops: DDB, Doner, Deutsch. The reason? The client said the recession has cut its marketing staff so severely that it couldn't handle managing more than one vendor.

So media agencies in a town in which separate media reviews are so common they're almost tradition, couldn't even get the client to consider splitting its business because there were layoffs in the marketing department.

How much do you imagine the relentlessly anti-unbundling Deutschers hammered home their "full-service" credentials to Honda during this pitch? Every other sentence, I wager. Doner, of course, thinks it's still 1990. And don't even get me started on the Omnicom contender. DDB and its creative siblings would have strangled OMD in the cradle if John Wren hadn't forced them to play nice with their baby sister.

You can see how this pattern might repeat in other markets and with much bigger clients. Clearly, the recession/depression we're wallowing in is an even bigger threat to media shops than we imagined. Not only does it encourage penny-pinching at the expense of everything else, it also threatens media agencies' hard-won freedom.

It's been fun dismissing chatter about rebundling as hissy fits from creative shops that have lost their greedy little grasp on media services. But the industry's economic pain isn't easing anytime soon - and the possibility of enslaving the media function once again suddenly seems all too real.

It's not that big a stretch to imagine a major global marketer hard hit by hard times making the same blockheaded demands in its review that Honda Motorcycles made in its contest. Or to suddenly decide that it wants one-stop shopping again.

Media shops would do well to heed the dead canary at the entrance to the mine.