LOS ANGELES--The Interpublic Group of Cos.' first global media negotiation company, Magna Global, unveiled last week, is one of many attempts by global media networks to maximize clout: a way to "leverage our assets in a consolidated media market," says Bill Cella, chairman of the new entity's U.S. office. But media-agency rivals and consultants say the novel structure's real impact may lie in conflict management.
Magna will manage the ad spending of its IPG sisters-media networks Initiative Media and Universal McCann and IPG shops that buy for their clients-then negotiate rates, value-added deals and other elements with media companies. Magna will receive only spending totals, no proprietary information. Buying and planning stay at clients' respective media or brand shops.
The concept effectively eliminates price competition among IPG agencies in reviews or with sellers. But Magna's mission is broader than negotiating cost-per-thousand levels, say its executives. They cite dealing for value-added benefits, including programming opportunities, among their duties.
The operation rolls out in the U.S. and U.K. on Sept. 1 and, over time, in seven markets. In the U.S., the focus initially will be national TV, on which IPG shops spent about $8.6 billion last year, per the company. That's roughly a quarter of all dollars spent in that arena last year, a number IPG pegged at $33.7 billion.
The need to manage conflicts in networks formed from different agencies has affected the top-tier networks' structures. To avoid antagonizing conflict-wary clients, Bcom3's Starcom and MediaVest are auto nomously housed under SMG; a similar structure is being weighed for WPP's The Media Edge and MindShare, and sources expect Publicis' Optimedia and Zenith to combine in the U.S. in much the same way.
In addition, Cella, like Magna heads elsewhere, will report to Larry Weber, CEO of IPG's newly rebranded Advanced Marketing Services, which contains no ad agencies and so insulates Magna from clients and their proprietary data. As Bruce Nelson, chief marketing officer at IPG, put it: "Advanced Marketing Services becomes a beautiful Switzerland."
"Now we can go to our clients and say, 'Everybody else is doing it. You can't tie our hands because it's not in your interest anymore,' " said the head of a competing media network.
As for leveraging size, many downplayed the announcement. "Window dressing," said one, but added: "I do think it might well make Omnicom and WPP shiver, because this may be a new marketing tool for IPG."