Media agencies: how do they work?
We hear they do everything from buy stuff to produce the “content,” but we know that media reviews are currently hotter than Brazilian creative directors.
This summer alone, we’ve seen such reviews from Procter & Gamble, Johnson & Johnson, Sears, Coca-Cola, Mondelez, Volkswagen Group, L’Oreal, Sony, GoDaddy…the list goes on. In June, Morgan Stanley estimated that the value of all the media accounts under review totaled $28 billion for the five major holding companies, with Publicis and WPP facing the biggest risk/opportunity. (That total is larger than the value of all such reviews held over the past three years.)
Sources close to the matter tell us that one person is particularly interested in this development: professional angry man and amateur hobbit Sir Martin Sorrell.
We hear that Sorrell hasn’t just been watching his company’s standing in the new media wars–he’s actually been making an appearance at every big media pitch around the world.
Sorrell was present at the GSK review in London, the first round of the P&G review in Cincinnati, the Volkswagen review in New York and the Sony review. So he’s getting around.
Why is Sir Martin making his presence known at these otherwise casual gatherings?
Last fall, WPP invested $25 million in an ad tech company called AppNexus, and Sorrell positioned that purchase as a way to help his company compete with Google and Facebook, thereby leaving Omnicom and Publicis with “nowhere to go.”
Earlier this summer, Sorrell also faced an internal revolt of sorts from his own investors, 22 percent of whom did not approve of his ridiculous $60-something million pay package. (He did make less than Miles Nadal, but we all know what happened to him.)
So not only does the WPP organization have the most to win or lose in this media agency toss-up–Sorrell himself has quite a bit to prove to both clients and investors. As for his employees, whatever.
In flying around the world and sitting in on these pitches, Sorrell doesn’t just want to let clients know that he prefers to win–he also wants investors to believe that he’s worth all that money and that his big media/tech investments are paying off.
But if it helps him sleep at night…