IPG Reconsiders Magna’s Approach To Media Buying

Magna Global USA’s operational model has some flaws that have created heightened levels of frustration, both internally and externally, in the television media-buying process, sources said. And executives at Magna parent Interpublic Group are discussing ways to fix it.

When it was created three years ago, Magna was touted by then IPG chairman and CEO John Dooner as an innovative new model—the formation of a separate media negotiating company that would use the combined $8.6 billion in national TV billings of all IPG agencies to get the lowest possible pricing for its clients. But broadcast and cable network sales executives said that while Magna gets its clients similar ad rates to rival mega-media agencies, its extra layer of negotiators makes the process more tedious and drawn out for both sides.

“Magna has to negotiate dollars for price and they don’t even know what the product is,” said one sales exec. “We are trying to provide value and they want efficiencies.”

All sales executives and fellow media buyers interviewed for this story had nothing but respect for the professionalism of Magna’s top negotiators, Bill Cella and Larry Blasius. However, the main internal source of frustration lies with media buyers at IPG agencies Initiative, Universal McCann and Deutsch. They are said to be having trouble swallowing a system in which they service accounts all year, only to have Magna execs negotiate upfront ad prices for their clients. No executives from those agencies would comment for the record.

“You always want to cut your own deals for your clients,” said one network sales exec familiar with the problems. “You service your clients all year and when the fun part comes—negotiating them the best deal—you have to turn that over to someone else.”

“Magna is clearly delivering significant benefits to its clients,” an IPG rep said. “The way Magna works with our agencies continues to evolve. We will always look for opportunities to make the process more streamlined and efficient for all parties.”

Dooner, who is now chairman/ CEO of McCann WorldGroup, did not return calls for comment.

Insiders at IPG said discussions are still taking place as to how the internal structure can be reworked, but added that whatever is done will mainly involve streamlining the relationship between the IPG buying services and Magna.

None would comment on a scenario that would allow the IPG buying units to share specific client information with the Magna negotiators and give Magna the final authority on all deals. That would create an organization like Omnicom Group’s buying service OMD, which does have final say on deals done for clients of siblings BBDO, DDB and TBWA\Chiat\Day.

No Magna clients would comment about their relationship with the shop.

One sales exec said he would not underestimate “turf problems” as a major reason for the internal reevaluation of the Magna model. “At Group M, Marc Goldstein [for MindShare] and Rino Scanzoni [for Mediaedge:cia] negotiate for their own clients,” he said. “They share information, hold strategy meetings with [Group M chairman] Irwin Gotlieb and use the combined buying clout of both agencies to try to get better rates, but at the end of the day, Marc and Rino do their own deals. The same is true at OMD. But at Magna, each agency can question the deals that the Magna execs negotiate.”