The agency pointed out that it didn’t want to be another “big, boring, faceless media agency,” adding that the new set-up would be part of its ambition to be “a world class communications agency that puts strategy and creativity at the heart of our business.”
MediaCom’s retreat from media buying could be interpreted as one motivated by necessity. After all, the agency lost a number of big local accounts in 2009, including Westpac and David Jones, the latter estimated to be worth as much as US$38 million. The impact of this cannot be underestimated.
But MediaCom is also making a strong case against the current trend of media pitches being called on price alone. With agencies across the region being squeezed by clients and some pitches often resembling little more than procurement exercises, there comes a point where they need to ask whether it is worth the trouble. MediaCom knows only too well about cost cutting. The agency last year decided not to even contest Nokia’s $415 million global media review, arguing that it was simply offering too little to make holding the account worthwhile. Of course, this trend goes beyond MediaCom - rumours around many of the big pitches of the last few months, including the Unilever business, suggest that price played a bigger part than usual in the final result.
So what will the MediaCom news mean for media agencies in general? Without question, media buying will continue to be an integral part of an agency’s offerings and that is not gong to go anywhere soon. Amid all the talk about the return to full-service agencies, even the most ambitious creative shops would be hard-pressed to replicate the depth and complexity of services that media agencies offer in this respect. And while several of the global MNCs may be able to look in-house for certain media services - as was seen in the case of Proctor & Gamble, which took over control of its lucrative TV buying business in China - the majority of clients are still highly under-equipped in terms of both talent and scope.
At the same time, however, the MediaCom example can be interpreted as a positive step for the media industry in terms of what agencies can offer to the market. More and more media agencies are now attempting to provide a complete roster of media, planning and strategic services.
Rather than narrowing the agency’s scope, the changes at MediaCom could in fact see it emerge as a stronger, more sustainable entity, and could be a model for others in the industry to keep a close eye on.
Got a view?
Email michael.o’neill@media.asia
This article was originally published in the 11 February 2010 issue of Media.
