October 26, 2007


Consolidation of media buying at huge mega-media agencies has erased clout because no media seller can afford to offer one of these behemoths a lower rate. Discounting to a WPP agency, for example, means lowering rates for over 20% of all media billings; no media seller can afford to do that. Moreover, since media buyers change jobs very often, no discount could be kept from other media agencies. As for keeping creative and media together, the original rational for unbundling was to get media people out from the back of the full service agency 'bus'. The reason broad market creative and media won't be rebundled, however, is that all of these holding company siloes have new ways of charging advertisers additional and very profitable fees.

On the other hand, smaller media agencies can make confidential deals with the media that the sellers don't have to share with dozens of other advertisers and agencies. So, the fact is that if media negotiating clout can exist at all today, it's likely to be found in the smaller, more agile players.


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