Monthly Archives: July 2013

My Agency Can Beat Up Your Agency

The business world is abuzz with talk of the merger of Publicis and Omnicom.  Like it or not, two of the largest advertising agency financial holding companies coming together will have major impact on the industry.

These two companies coming together can mostly be viewed as a positive for smaller independent marketing service agencies. The more consolidation there is at the large holding companies the ‘safer’ the decisions that they have to make. These are public companies whose primary interest is increasing shareholder value.  Public companies answer to Wall Street. Wall Street prefers predictable results in financial reporting. This forces companies to make short-term decisions that could harm them in the long run; like laying off expensive personnel to make quarterly numbers despite whether those people can help you in the tomorrow. I worked at a large agency holding company ten years ago. I was a casualty of numbers despite being the only person in the agency’s New York office bringing in incremental revenue. The agency I worked for has been down more than up since I left and I’ve gone a more entrepreneurial route.

These financial holding companies were already big. They just weren’t the biggest. Now they are. But the obvious question is how does this merger benefit clients? I don’t see it. Clients that wanted a large pool of resources already had that. Clients that wanted stability already had that. Is there a benefit of the new ‘clout’ of the combined media agencies? No. Because they should be negotiating each client deal separately AND the media sellers aren’t going to roll-over just because these guys are now even bigger. In fact, this merger can hurt clients because the agencies are now negotiating against themselves. Fewer players in the market negotiating shifts the power balance back to the sellers.

So what is this merger about? Is it the personal war between Maurice Levy, CEO of Publicis and Martin Sorrell, CEO of WPP, the world’s biggest agency holding company until today? It’s no secret that these two do not like one another. Could it be that Levy is on an acquisition spring just to thumb his nose at his rival? If that’s the case what will Sir Martin do to one-up Maurice? And why is this “my agency is bigger than your agency” nonsense good for anyone?

While not a good move for clients of these two holding companies in the end there might be greater value placed on smaller more integrated marketing agencies who will likely have less turn-over, fewer distractions, less bureaucracy, and better talent working on client business.

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The MySpace Race

MySpace began an ad campaign recently trying to re-introduce the former social network as a relevant music service/app. It is trying to help emerging artists, musicians and creative types get discovered. The new ad campaign is well produced, well funded and loaded with great talent but will it return this former social network to its former glory as a mobile and social music service competing with Pandora and Spotify or is it too much too little too late?

The ad campaign, said to be as high as $20 million, is airing on select cable networks (ESPN, Comedy Central, MTV, MTV2, Fuse, BET and Adult Swim) Jimmy Kimmel’s show on ABC and the NBA Finals.

 The jury is still out, but early results since Specific Media and Justin Timberlake bought MySpace are telling. Last June, around one year after the brand was sold, monthly site visitors—according to Compete.com were over 20 million. In May they were less than half that number. Since June they have lost about 25% of their traffic. While their raison d’être is a mobile app, many people will research them online first. So this is an indication that the early adopter peak may have hit. MySpace said that 1 million apps were downloaded in June. Based on that I’ll say the campaign did what it was supposed to do, get people to the site and download the app, but with traffic down considerably since mid June, app downloads need to pick up the pace for them to survive.  If enough cool people use the service it will eventually catch on. My issue is that the spots themselves try so hard to be cool that they may end up being perceived as forced, desperate and, therefore, uncool.

 Did they wait too long after the initial buzz to undertake this campaign? Should they have done this sooner?

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