Media Buying Briefing: Mediabrands CEO Daryl Lee discusses the soul of the media agency business

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IPG, which is about to announce its full-year 2020 financial results this week on Feb. 10, appears to have weathered 2020 decently, if you ask Daryl Lee, who globally runs Mediabrands, the media network that houses UM and Initiative as well as business units Reprise, MAGNA, Orion Holdings, Rapport, Healix and IPG Media Lab. Initiative just won the $2 billion merged T-Mobile/Sprint account a few weeks ago. Lee spoke to Digiday on media and creative agency relationships, ethics and the digital platforms and the roles and uses of data.

Here’s an edited version of the conversation:

How did your business manage in 2020?

We came through last year down a few percentage points in revenue, which I was surprised by — I thought the business would take a hit. A lot of it was a portfolio of clients that are forward-looking. Whether by chance or design— I think by design — we have a set of clients that are in growth mode like Amazon and Spotify — platform brands that are doing well in a world that is primarily mediated through virtual.

We launched Reprise Commerce, a dedicated e-commerce global capability based on all the work we were doing on e-commerce. We also formalized all our content assets into the Mediabrands Content Studio. That’s why I talk about strategic orchestration. My interest has always been in integration. But where I’m at now in terms of thinking about media agencies is, we are actually the lead agency in many clients’ minds already. It’s hard for creative agencies to understand or accept that. And we figured this out when we do these combined pitches with them at a holding company level. We’re like, ‘We’re going to lead the story because we understand the business. Not because we’re in media.’ Because the data of our business is the data about consumer demand. That’s happening subtly and subconsciously, with clients looking at media agencies as lead agency or AOR. That’s new.

So is this the beginning of rebundling, or something different?

I think it’s something different. Because rebundling would just reset to the old relationships, and I would resist that. I’m not going to put UM back into McCann — that’s the way it would be understood. Right now, UM is helping McCann win business and not vice versa. No, I think it’s a recentering. What’s at the center of an integrated agency group? There are all these agency groups where the creative is the anchor, and I think that’s the wrong model — or at least not the only model. Because data sits at the heart of media, and will be at the heart of every integrated proposition for clients.

So talk about your data strategy, since IPG’s invested so much into it.

Acxiom is the data set and also involves data management. Kinesso is a group run by Arun Kumar, [IPG’s chief data & marketing technology officer] that’s basically all the technology that’s required to make that data useful. He has a whole product team to make sure the data flows, whether it’s reporting or insights or even platform buying and planning. Because right now, Acxiom data is working for clients very specifically, as a part of CRM or loyalty programs. That data’s not being used to drive marketing and investment and allocation. [Kinesso creates] the pipes and systems to make that data accessible to us, and puts analytics on top of it. Data’s only as important as the insights it yields.

You’ve focused a lot on the soul and conscience of Mediabrands.

Collectively, the response to last year and George Floyd was intense in the organization. The authenticity of the outrage was almost paralyzing. So we had some panels around We Can’t Breathe, which were intense and angry and good. Coming out of that we all thought, it’s not enough to have just an internal catharsis. We are significant players in an ecosystem that’s creating platforms for hate and violence. This is unprecedented in human history.

The question in my mind is, if Hitler was alive today, what would Facebook and Twitter do? And the answer is not evident. That shook me. It’s really shocking. Every other media publisher would be like, “Hitler may be the democratically elected president of Germany, but we need to shut this down” and then become watchdogs. There was no point at which Facebook or Twitter was becoming the watchdog. We did an awful call with [Facebook founder and CEO] Mark Zuckerberg and the top advertisers in the world, where instead of saying, “This is a huge problem and we’re doing everything we can, and we just don’t have the content moderation resources to catch everything but we’re trying,” he just said, “This is a question of freedom of speech. And if you’re going to have on the one hand Black Lives Matter, you have the absolute obligation to allow the opposite side to articulate their views.” And I was like, done! You’re an advertiser-driven platform acting like you’re some unaccountable philosopher king. We were outraged.

But we decided, let’s not box ourselves into an anti-FB campaign, let’s create some principles that will be long-standing since this will be a long fight. The digital players don’t think of themselves as publishers, they don’t have the same standards. And we’re going to have to create a set of principles which can be applied to all media, which help them build standards.

Color by numbers

R3 just released its December 2020 Global New Business League rankings, which includes a breakout of media agency wins and losses.

—All top 10 agencies stayed within the top 10, but moved around, except WPP’s Mediacom, which held the top spot. The biggest surge came from IPG’s Initiative, from the 8th spot to No. 2. No. 3 ranked Wavemaker (WPP) dropped from the No. 2 slot, followed by Publicis’ Starcom at No. 4, up from the 5th spot. Omnicom’s OMD and PHD took the No. 5 and 6 positions, respectively, down from No.’s 3 and 4. Havas Media jumped from No. 10 to 7, followed by WPP’s Mindshare at No. 8, down from 6. Publicis’ Zenith dropped from No. 7 to 9, and independent giant Horizon Media slid from No. 9 to No. 10.

—And in Digiday’s fourth annual breakdown of what the price of a 30-second Super Bowl spot ($5.5 million this year) would buy in digital media, marketing reporter Kimeko McCoy has some eye-opening stats from a canvassing of media buyers. Here are just two:

  • According to a media buyer, YouTube skippable in-stream ads run an estimated $.02. In terms of Super Bowl spending, that could buy 275 million impressions on the video platform.
  • Campaigns on Discovery+, per another media buyer, could run at $12.87 cost-per-million. With a budget of $5.5 million, buyers could afford 427 million impressions on the streaming platform.

Take off and landing

—Omnicom MENA named Luca Allam CEO of its PHD unit, based in Dubai, promoted from managing director of PHD UAE. Allam will oversee PHD’s operations across UAE, Lebanon, Saudi Arabia and Egypt, and reports to Elda Choucair, COO of OMG MENA.

—GroupM last week announced the launch of its Data Ethics Compass, a web-based tool designed to help advertisers evaluate the ethical risk of data. With partner Unilever (a major Mindshare client), the tool, which is still in beta, is meant to help agencies and clients ensure the data they’re using passes ethical risk thresholds, said Krystal Olivieri, GroupM’s svp, data strategy and partnerships. “We tried to make it smart enough to even understand regional specifics,” said Olivieri during a recent demo of the tool. 

Speed reading

—Digiday’s platforms, data and privacy reporter Kate Kaye explains how Walmart’s new DSP, built by The Trade Desk and launching later this year, will attract more ad dollars, but surprisingly, not as much away from Amazon as you’d expect. Instead, those dollars are expected to come out of performance and shopper-marketing budgets — and even brand budgets sometimes.

—Kaye also offers an excellent primer on what to expect from federal and state privacy legislation this year. In short, states are pushing ahead with establishing their own privacy rules, which may or may not weaken federal efforts.

—Former Medialink, Ebiquity and OMD UK executive Nick Manning writes in Mediatel UK about what is and isn’t happening with in-housing among clients. In short, clients have taken on many of the duties and worries around ad-tech, privacy and data/analytics work, but have left media execution largely in the hands of media agencies.

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