Why America's Biggest Media Buyer Is Actually 'All Others'
- by Joe Mandese @mp_joemandese, May 21, 2021
Madison Avenue likes to boast about its media-buying clout, but the reality is even the biggest media services organizations are also-rans to the long tail of smaller, regional, bundled, or in-house media buying organizations. That's the finding of a MediaPost analysis of year-end media billings estimates for the major U.S. media-buying organizations released today by Comvergence.
The analysis shows that Madison Avenue's "Big 3" -- Publicis Media, GroupM and Omnicom -- combined represent only 38.5% of U.S. media billings, while "all others" represent nearly two-thirds of U.S. media buys.
In fact, the Big 3's share of total U.S. media billings fell two percentage points from 40.5% in 2019.
And if you analyze the individual media agency groups within those holding company units, the top 5 represent less than a third of total U.S. media buys. And that's including giant independent Horizon Media's 5.8% share.
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"Clout" has always been spin. Huge media buying conglomerates has used the notion of buying efficiencies yielded by virute of aggregated power as a rhetorical device for winning new business. The question one must ask is, if clout is real, why do they all pay higher CPMs year over year? One might counter that clout keeps costs from rising as much. But that is more a function of negotiating prowess coupled with the history of a business relationship than it is clout. And as more buying moved to programmatic platforms, even those factors will matter much less.
Joe, while this is an interesting question, media buying--at least for TV and magazines---is more heavily concentrated in fewer hands than before. In days of yore, up to 100 ad agencies bought national TV time to any significant extent and they probably accounted for 90% of the ad dollars. As I recall, no single entity had anything like the share that the top three to five media buying conglomerates now control. In the case of magazines, there were no centralized magazine buying groups. Each account at the agency made its own buys---some went strictly by the rate cards, others didn't---same agency: different clients.
Mere ad spending figures don't tell you whether media buying "clout" is a myth---or not. What would be interesting would be an average national TV CPM for, say the top five media buying shops collectively versus your "long tail" grouping. If Comvergence can't provide such information I wonder if SMI would do so---perhaps on an index basis---so as not to ruffle any feathers among its cooperating agencies and certainly without providing data for any agency. That would be the most revealing evidence and I'm betting that the big shops would "win" in such an analysis.
@Ed Papazian: That's probably true, but TV and magazines now represent a minority of ad dollars spent on media.
Joe, you are right if you count all of those search ad dollars plus the direct marketing, the store listings, head hunting, etc. activity that is mainly in digital media. However, for the typical branding advertiser you see on national television, TV tops digital by about four to one in ad spend. And the way media buys are negotiated between the extremes of "linear TV" and programmatic digital are very different---especially where the concept of buying "clout" is concerned. Anyway, I thought that it would be interesting to see some real TV CPM comparisons for the same network types, dayparts and commercial lengths between the big media buying outfits and the long tail folks also for network and cable TV. If your premise is correct, they should be about the same.