Donovan Vs. MediaBank: Round 3, Publicis Poised To Consolidate

Just weeks after Interpublic's Mediabrands division pulled all of its U.S. media-buying data processing business from industry stalwart Donovan Data Systems and consolidated at VC-backed MediaBank, Publicis' VivaKi is poised to announce a consolidation of its data processing services. And the winner will be MediaBank. Or maybe Donovan.

Insiders say a final decision will not be made until after Thanksgiving, possibly as soon as Monday, and that it will add yet another chapter in the ongoing saga of MediaBank vs. Donovan, the two finalists in the VivaKi review.

Some observers might be surprised to learn that Donovan is a finalist in the VivaKi pitch, because of the contentious, high-profile break-up its Starcom MediaVest Group unit had with Donovan four years ago, which resulted in MediaBank's first major agency holding company win, lawsuits, and finally, an arbitration agreement that bound the two companies to confidentiality over the terms of its settlement.

Executives on all sides of the story say there still is a fair amount of friction between the companies over that blow-up, which at its height pitted VivaKi chief Jack Klues against Donovan founder and chief Michael Donovan in a battle of egos that led to claims, counterclaims and the massive, painstaking shift of SMG's account to MediaBank.



But four years later, a new air of pragmatism has emerged between the companies, if for no better reason than that a big agency holding company like Publicis requires a viable competitor in its data-processing reviews, if only to keep upstart MediaBank's pricing in check.

MediaBank is generally believed to be a more cost-efficient alternative to Donovan's bigger, more established legacy services, which have been the dominant provider of Madison Avenue's data-processing needs for decades, but both companies claim to have adapted new state-of-the art digital media processing systems. In a memo distributed to its staff following Interpublic's decision to consolidate at MediaBank, Donovan specifically cited the fact that MediaBank's bid was below what Donovan would handle the business for.

MediaBank, of course, has deep pockets and is backed by some big VCs, including Lightbank, which is one of the lead investors behind GroupOn. It also recently named former Yahoo trading platforms chief Bill Wise to run the company, and to accelerate its development of more sophisticated digital trading technologies.

Both MediaBank and Donovan claim to have developed more state-of-the-art digital data-processing systems, and all eyes will be on VivaKi's decision to see if it validates one or the other's claim, as well as the wisdom of Interpublic's move.

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