Amid Consolidation, Media Boutiques Begin To Blossom

Like some immutable law of physics, the media buying universe contracted and now some think it is poised to once again pull apart. The consolidation of media buying that took place over the past several years may have left only a handful of independent media services companies alive and kicking, but some observers believe that very same force is poised to trigger an expansion that will usher in a new golden age of media independents.

That notion seemed to be underscored late last week when tobacco giant Brown & Williamson moved its print media account to upstart Media Kitchen from MediaCom Worldwide.

"It is vindication and validation that a strategically-led operation that literally has creativity at the front of its house is being bought by clients," says Paul Woolmington, CEO and co-founder of Media Kitchen, one of a string of strategically-oriented media boutiques that have emerged in response to the major agency media behemoths.

While the shop does not tout its billings, Woolmington estimated it was at about $640 million prior to the Brown & Williamson assignment, whose billings were not disclosed. Much of those billings come from creative agencies that sub out their media strategy to Media Kitchen, as well as a few major clients it handles directly, such as Andrew Jergens Co. and Delta Swan.

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"I see it as a continuing need, for many advertisers to not want to be part of a mega agency trend," observes Jim Surmanek, CEO of Media Analysis Plus, which advises clients on its media agency relationships. "It's the possible fear of getting lost in a bureaucracy, or it is advertisers who believe they need more of a local presence if you will."

Surmanek cites the recent launch of MB Media Group, by former International Communications Group execs Andrew Butcher and Bruce Milner, as well as the launch of TargetCast TCM by former Havas and Young & Rubicam heavy Steve Farella as recent examples of other new independents.

"The conventional wisdom is that small shops are out of business. That's total BS. I can understand $100 million plus clients, saying they need a big agency to handle their business, but there are a slew of advertisers that don't and they theoretically represent a third of all ad spending," explains Surmanek.

So while Madison Avenue keeps tabs on who will finally be the one to gobble up Horizon Media, one of the last of the major free-standing independents, others point to the emancipation of KSL Media, which has just bought itself back from the Interpublic Group.

"Your going to see a full circle," predicts Kal Leibowitz, founder and chief of KSL. "Right now Wall Street controls Madison Avenue and it's all about earnings per share and what you can do to drive the price of the stock up so everybody can exercise their options. It's not about what you can do for the client's business."

Leibowitz claims big Madison Avenue shops have grown to "formularized" and "undifferentiated" in their approach to media planning and buying and that is what is creating an opportunity for a new wave of independents."

Meanwhile, Media Kitchen's Woolmington sees the new competition as having a positive impact on the biggies. In the spirit of imitation being the sincerest form of flattery, Woolmington notes that the rage on Madison Avenue is to create media strategy boutiques within the behemoths, though he says that is likely to result in a meaningful change in their culture.

"What surprised me was I didn't think the whole market would move," he says, referring to the move toward communications planning at the big shops. "But at the end of the day, I'm sure it will bear out that TV will remain the No. 1 medium."

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