Magna model is working just fine, thank you
Recently, wrinkles in the Magna Global model for consolidation have been seized on in certain quarters as a weakness. Voices at media companies and within our own Interpublic Group agencies question the effectiveness of our negotiation division in the upfront. Questions are raised, at times in publications like Adweek ["IPG Reconsiders Magna's Approach to Buying," Aug. 23], about shortcomings in our process. Is there merit to such comments, or are they coming from people who are simply threatened by the changing media environment?
In the U.S., a quick but definitive answer can be found by looking at the upfront: The cumulative price increases for prime-time CPMs between '98-'99 and '03-'04 was approximately 50 percent, while cumulative GDP increases were only 14 percent. This trend clearly supports the stance we at Magna take on the upfront, which is admittedly a pretty strong one—too strong, it seems, for some on the sales side, who would obviously prefer to deal with individual agencies when it comes to closing deals. That would allow them to serve up different pricing models; cut back on large, low-CPM advertisers in a seller's market; hold back on added value in deals with midsize or smaller marketers. I know the drill— I was in sales for 19 years.
Our model seeks to balance the needs of IPG's two major media networks and our advertising agencies for the good of our clients. That model is working. Does the process need streamlining and fine-tuning? Of course. Are we looking to broaden and evolve the Magna concept? You bet. Does the resistance to our new idea surprise us? Not a bit. In a competitive environment, that's often the penalty for taking a strong stand in the marketplace.