Digital IS Mainstream Media, Agency World Adjusting

Attentive readers will have noticed that today’s column has a new name, and I guess we must talk about that first. We are now known as “Media Insider” versus our old name of “Online Spin.”

I think changing the name of a column is a minor event in the grand scheme of things. But the fact that we’re dropping something called “Online” in the name of a column and replacing it with the word “Media” tells us a lot about the state and direction of the advertising and media industry.

It was a mere decade ago that trying to convince marketers to shift some budgets to online was a very difficult thing. At a company where I started during the back end of the last decade, the average global digital spend was below 3%!

Many companies back then had objectives like “shift x% of total advertising dollars to digital.” Evangelists roamed the speaker circuit making fun of companies and CMOs that spent little to nothing on digital advertising.



Fast-forward to today. There is a whole (greedy and part seedy) tech industry that eats massive amounts of digital ad dollars, to the extent that digital budgets are now larger than almost any other slice of the marketing pie. We struggle with significant issues like digital ROI and attribution, transparency, fraud, net neutrality, ad blocking and more. Google and Facebook are the largest advertising platforms on the planet.

And marketers spend a disproportionate amount of time trying to understand it all.

So yeah, digital media has gone from marginal to massive in 10 years, and is now as much mainstream media as TV is. Heck, in some cases, digital is TV (and vice versa).

So with that out of the way, we can address an event from last week that falls more or less in the same category of digital driving media: WPP’s announcement that it was merging MEC and Maxus, two of their media agency brands.

This is not an insignificant event, first of all for the people that work in either of the two companies, as jobs will be lost, which is never fun.

Second, clients (we assume) choose their media agency partner with great care, but now that agency will cease to exist as an individual entity. The name will change, the people will change (and might struggle a little with motivation during the uncertain transition), the headquarters will move (from London to New York no less), the CEO will change. As an advertiser, you might even find that a major competitor is now part of your newly merged agency client roster. Oopsies!

We have always stated that all global media holding companies are, first and foremost, financially driven companies, and agency service providers second. There is nothing wrong with this, as long as marketers understand that, ultimately, the agency’s first priority is Wall Street.

Advertisers are significantly restructuring their agency ecosystems and rewriting their agency contracts because of recent revelations about media agencies’ digital media practices and industry challenges. So this merger is all about cost savings and responding to an environment where managing clients’ media assignments is becoming less profitable — especially since digital media is the largest chunk of a clients’ media budget.

If you’re a WPP shareholder, you’re all for the merger. If you are otherwise impacted by the merger, I hope it works for you, too.

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