As part of its push to cut $1.5 billion in costs by 2022, WarnerMedia has in the past several months reduced the number of agencies it uses around the world from 3,000 to a few dozen, according to Business Insider.
The entertainment conglomerate — which is pushing to subsidize its strategic streaming focus amid pandemic-driven declines in TV advertising, box office sales and other revenue — has begun pushing NBCUniversal, HBO Max, DC Comics and other business units to use the selected agencies for creative, says the report, based on sources with “direct knowledge.” The units used to choose their own agencies.
A former WarnerMedia marketing executive told BI that media-buying agencies were not affected by the agency consolidation because they are locked into contracts that guarantee specific rates.
WarnerMedia, which declined to comment for the report, is funneling most marketing through “a handful” of agencies willing to sign long-term contracts at discounted rates in return for more work, per the sources.
Agencies are also being required to make quarterly reports on their WarnerMedia revenues and discounts.
The company is said to have created a database that allows its marketing teams to search agencies by specialty and past work.
One source said that some executives are concerned that the authorized agencies could be overwhelmed by the marketing demands of WarnerMedia’s many units and properties.