S4 Capital’s Sir Martin Sorrell (below) has been confiding to Digiday about his plans to buy a “first party data” company, averring that Dentsu’s Merkle is the kind of company he’s looking for, that Acxiom (just bought by Interpublic) and Epsilon (by Publicis) are not because they don’t actually own their data.
Interesting enough but right at the end he says, in answer to the question are you on the lookout for a traditional media agency: “No. There’s no growth there because of the procurement pressure. It’s a space where brawn rather than brains is going to win.”
Which just about sums up the current travails of the big agency holding companies: media has been where most of the recent growth has come from but client pressure on costs has put paid to that.
Media revenue has become relatively more important as client/creative agency arrangements are much more likely now to be on a project rather than agency of record basis (AOR) so it’s much more difficult to forecast revenue. The client may make a big TV campaign or may choose not to: in which case there’s no money for the creative agency, unlike the good/bad old days.
Media is much more of a continual process but only if the media agency gets a fair share. Clients are in-housing programatic and digital, where the smart media agency traders used to make much of their money.
Currently such agencies still employ thousands of people worldwide, many working on menial tasks like filling in endless spreadsheets.
Sorrell may be right to think he’s now in a better place than WPP is. But it’s still hard to see how S4C (which owns MediaMonks and programmatic outfit MightyHive) is going to get the firepower to grow seriously big. Even if its business is growing at 40 per cent a year, as Sorrell says.