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Neck And Neck In The Media Race

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Most of the agencies featured in this year's Media Agency Report Cards issue (the same 14 that received grades last year) should be pleased. No, they didn't all garner A's (as no doubt some of them will argue they deserve), but more than half of the group improved by at least a half grade compared to last year. Three shops— Mediaedge:cia, MediaVest and OMD—received overall A grades for their 2005 performances. That's two more than the previous year.

Revenue—the key metric in the numbers grade, not billings—rose an average 11 percent among the group, a mark exceeded by nine shops. Horizon and Mediaedge showed the biggest revenue percentage gain, with both up about 25 percent. (Other factors go into determining the number grade, such as revenue-to-staff ratio and size of an agency's revenue base; and remember, we use U.S. figures.) Four shops (OMD, Starcom, PHD and Zenith) bunched up at the 15 percent gain mark. This sort of clustering, especially at the upper end of the performance scale, is unusual.

But it reflects the fact that this group of agencies is highly competitive and, strive as they do to be distinctive, there is not as much differentiation as in the past. They have all acquired impressive buying clout, for instance, and sure, they all have their version of proprietary tools, but they are designed to solve similar marketing problems and address the critical issues of the day, such as gaining better insights into consumer media consumption or showing clients that their ad dollars are well spent. But how different are they, really?

These agencies, of course, represent the big league of media planning and buying. In the NFL, the maxim is that on any given Sunday, any team can beat any other team based on a set of seen and unforeseen circumstances. The same might be said of the top-tier media agencies. At a recent industry conference, Jack Klues, CEO of Publicis Groupe Media, noted that the six agencies represented on stage beat each other only by a nose in high-profile, large account reviews. The danger, others agree, is that the industry will stunt its growth through commoditization.

Which begs the question: When will someone come up with a media offering or a positioning that is not replicable and truly breakthrough? —Steve McClellan, media editor