MediaBank Vs. Donovan: Round Two Will Be Global

Fresh off its win of Interpublic's consolidated data processing account, and with the fate of incumbent Publicis hanging in the wind, VC-backed MediaBank is embarking on a plan to go global. Details of the plan, which are expected to be announced today, call for a major expansion into Western Europe -- especially the U.K., where arch rival Donovan Data Systems has one of its strongest bases outside the U.S.

"This will be Round Two of MediaBank vs. Donovan," said Bill Wise, the ambitious online media marketplace pioneer who was named CEO of MediaBank with an aggressive plan to accelerate its core data processing market share by winning big agency holding company accounts, as well as a simultaneous plan to develop a state-of-the-art marketplace for trading all forms of media, not just online.

Wise's reference to rounds was an allusion to the fact that it recently wrested Interpublic's $25 billion media processing account from incumbent Donovan, which has been a near monopoly on Madison Avenue since it began processing data with its original legacy enterprise systems in the 1970s. The entry of MediaBank into the market earlier this decade put pressure on Donovan to accelerate the development and conversion of its older systems to make them better at processing digital media buys.



The first real round occurred four years ago when a well-publicized blowout between Donovan founder and chief Michael Donovan and Publicis Media Groupe (now VivaKi) chief Jack Klues led to the French agency holding company pulling the business for its flagship Starcom MediaVest Group account from Donovan and moving it to MediaBank. That gave MediaBank a real boost in the arm, which has been fueled with additional venture capital, and several acquisitions of smaller competitors, including many of their agency account relationships.

As part of round two, Publicis' VivaKi unit has been conducting a review of its consolidated media processing account, not just for Starcom MediaVest Groupe, but all of its digital and media services agencies. Publicis insiders say the VivaKi team has signed off on a recommendation, but would not say whether it was to go with Donovan or MediaBank, and that it is currently being evaluated by Publicis' Paris-based management team. A final decision is expected any day.

A decision to go with MediaBank would be even more pressure on Donovan, which in a memo to its staff implied that it walked away from Interpublic's business due to its demands for costs Donovan said were too low to service the business. Because MediaBank is backed by aggressive VCs, it may have a short-term competitive advantage in its ability to service business with lower margins on the assumption that its long-term returns would be great. Some of the VCs backing MediaBank are the same successful entrepreneurs who backed GroupOn and other successful digital enterprises.

So it may be no surprise that they tapped Wise, one of the key players who developed seminal online marketplaces, and oversaw Yahoo's humongous marketplace before coming to MediaBank.

Wise late Wednesday disclosed that he has restructured MediaBank into two separate divisions: one focused on servicing agency data processing needs; and the other to develop an open, online marketplace for buying and selling all forms of media, beginning initially with digital media. That's a goal that has been attempted by countless organizations over the past decade, although with the exception of Google's role in search, none have ever dominated the industry.

Wise said one of the unique advantages that MediaBank would have is its ability to seamlessly tie agency data processing systems with its media marketplace infrastructure. Among other things, that would allow agencies and marketers to simultaneously participate in open markets, as well as creating their own private marketplaces that achieve their own internal goals. Wise said to expect some "big news" on its marketplace infrastructure in the next several weeks.

Wise, meanwhile, said MediaBank's global expansion, which was approved by its board a couple of weeks ago, is being implemented now for a couple of key strategic reasons. One, he said, was it is just the next obvious opportunity for growth. The other is that it is a necessary component for continuing to service big agency companies, which are global or multinational in nature.

"All of our clients are global and it only makes sense for us to have a single platform for them to manage their business globally," Wise explained, adding: "Marketers want to understand how their campaigns are performing globally."

Donovan executives have maintained that MediaBank has two Achilles heels: its lack of a global infrastructure and the fact that it fundamentally is only operational in the U.S.; and the fact that its systems are a hodgepodge of the various legacy systems it has acquired - primarily Datatech and Mediaplex -- to build its infrastructure.

Wise acknowledges both of those factors, and said the global expansion plan addresses the first criticism, and that MediaBank already has momentum behind it, including a Canadian system that will be fully operational in six months, and a beta system in the U.K. that will be fully operational in about a year, with key Western European markets such as France, Germany and Ireland right after that. By January 2012, he said MediaBank's Western European infrastructure would be fully operational, and that MediaBank would already have begun development in other key international markets, especially BRIC nations such as Brazil, China and India.

As for the hodgepodge nature of MediaBank's systems, Wise thinks it's more of an asset than a liability, because it gives MediaBank the opportunity to pick and choose from the "best in breed," and he said that would actually be an ongoing process -- especially as MediaBank moves into new international markets, where there are unique regional and cultural reasons for doing media business differently, and for processing data differently within them.

"We're learning that Canada is a very different market from the United States, and in some ways, it's actually more complicated," he said, noting that this requires solutions that are unique to the Canadian marketplace.

In terms of MediaBank's rollout strategy, he said it would also include a combination of deployment strategies that would involve either building organizations from scratch, or acquiring or partnering with existing local systems providers.

The common ingredient in all the scenarios, he said, would be adopting the versions that most reflect the needs of the markets, and how clients transact in them, and wherever possible, innovating beyond what's been done before.

"At the end of the day this innovation is what's going to drive this marketplace, and we are committed to innovating," he said.

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