Disney's highly competitive, much anticipated $1 billion agency review is nearing its end. Disney is set to announce the big winners before October 11.
Sources tell MediaPost's Agency Daily that Dentsu Aegis Network and Omnicom -- each currently overseeing Disney-related accounts -- are the frontrunners, while Publicis Groupe is likely to pick up some of the smaller accounts.
The Groupe was not among the finalists for either the studio or network businesses, insiders report.
WPP withdrew from the MediaLink-led review because of a conflict with its client and Disney rival Comcast.
The new agency partner is set to begin servicing the accounts in January. All agencies now on Disney's roster are operating on a 90-day contract.
However, high-ranking insiders close to the Disney review are noting what they call unethical financial terms required by the company in order to land this business. (These executives are not directly involved with servicing this account and are raising their concerns before the official announcement to avoid criticisms of bitterness or revenge.)
It appears there are three main financial easements that Disney is seeking from its new agency partner.
While Disney has requested the now-standard reduction in agency fees and asked agencies to take a larger share than what is typical in terms of media discounts, Disney's third reported requirement is angering those who are familiar with the pitch. They believe Disney is exploiting its power and strength in an unethical way.
They also want to shine a spotlight on what they feel is Adland's hypocrisy. Holding companies and agencies are consistently under the spotlight over transparency and ethical issues, yet clients are not held to the same scrutiny, one ad executive gripes.
At issue is Disney's request that the winning holding company require the agencies' other clients to allocate what is being called a "share shift" — to spend more of their respective ad budgets on Disney properties. This means that if client carmaker X spent 20% on Disney channels this year, the media spend would now rise to, say, 23% in 2020.
Sources say at least two holding companies outright refused to consider this request, but one network allegedly did concede to these terms — if it was appointed agency partner. (While Disney's request may have been an aggressive attempt to wield power, it remains to be seen how the company could even audit and ensure these demands were met.)
Disney's financial requests may raise ethical and transparency concerns, but are not considered illegal, since it appears these discussions are rooted more in speculative rather than specific language.
Disney can request that the media-buying agency give "special consideration" to Disney platforms when talking with other clients.
"Media agencies are giants with massive clients that can have strong input regarding where to put their funds, so on the surface the reports of that request do not seem credible to me," says Gene Del Vecchio, adjunct professor of marketing, USC Marshall School of Business, and author of Creating Blockbusters.
"In fact, the media agencies would be unlikely to meet that criteria given the nature of their other clients' size and needs," he adds.
Furthermore, holding companies would be at risk legally if they did not get permission from their other clients first, in order to make that commitment, one lawyer adds.
While it's possible that Disney floated this share-shift client mandate to see how far it could push the parameters of a new agency partner, it does serve as an illuminating, but troubling, example of issues faced by agency leaders.