‘Media Boutiques’ Making Inroads

Aug 25, 2003  •  Post A Comment

It’s turning out to be one of the great ironies of the media buying business.
For years now the media industry has been fretting over how the consolidation of the big buying shops might impact their ability to sell advertising. As it turns out, the real revolution in media planning and buying may be occurring among decidedly smaller players, many of which are still beneath the radar of most big TV concerns, but who are beginning to have a profound effect on the way Madison Avenue values media, especially television.
Partly in response to the rampant consolidation of buying at a handful of mega-media agencies, a group of former senior agency media managers have struck out on their own and are forming smaller, much more strategically focused media shops. The mega-agencies have been writing them off as “media boutiques” that might pick off small scraps of media buying assignments but would never amount to any serious threat. That was until earlier this month when Media Kitchen, a 3-year-old media strategy agency, picked up a $47 million media account from Brown & Williamson that had been with Grey Advertising’s MediaCom unit.
Such things are not supposed to happen on Madison Avenue. To lose a blue-chip media account to another biggie is one thing, but to lose it to a virtual start-up is quite another. Despite its youth, Paul Woolmington, who founded Media Kitchen after stints running some of the biggest agency media departments, said his company is anything but a start-up. After the Brown & Williamson win, Media Kitchen’s billings are estimated to be approaching $1 billion.
Meanwhile, other former Madison Avenue media chiefs have been hanging their own shingles and picking up business. One such firm is TargetCast, founded by Steve Farella, former chief of Havas’ Media Planning Group and head of the media departments at Young & Rubicam, Wells Rich Greene and Ammirati & Puris. Andrew Butcher and Bruce Milner, the former heads of International Communications Group (now part of Carat North America), have also set out on their own with the Los Angeles-based MB Media Group.
Focusing on Clients
“It’s shops like Andrew Butcher and Bruce Milner’s that are capturing clients,” said Jim Surmanek, CEO of Media Analysis Plus, which advises marketers on managing media agencies. “Many advertisers just don’t want to be part of a mega-agency. They’re afraid of getting lost in the bureaucracy, and they believe they will get better service from a smaller shop. They’re saying, `I don’t need an Interpublic, Omnicom or WPP. I need Andrew and Bruce to pay attention to my business.”’
While that’s not an entirely new concept, the consolidation of media buying at the big firms has exacerbated that belief and created a new opportunity for independents.
“Right now, the big agencies are all about the numbers. It’s about earnings per share and doing whatever you can do to drive up the stock price. It’s not about what you can do for your client’s business,” said Kal Liebowitz, who recently bought the media independent he founded years ago, KSL Media, back from Interpublic for just that reason. “Now that we have more autonomy and control we can be more focused on our clients. Our business model isn’t about being bigger. It’s about being smarter.”
The proliferation of media boutiques is already having an impact among big agencies, many of which have created their own media strategy units to address the very same planning and strategy issues the smaller shops have brought to the attention of the marketplace and to some of the nation’s largest advertisers.
“That’s great,” Media Kitchen’s Mr. Woolmington said. “We like to see what they can do. If they really make a change, it will be good for their clients and good for the industry.”
Psychographic Targeting
As for those changes, they’re likely to be ones that shift the focus from the kind of broad-based targeting that TV-particularly broadcast TV-has always benefited from and move them to much more narrowly defined targets, TargetCast’s Mr. Farella said.
“Without question, television remains the dominant medium, but one has to question the way people consume media and, in particular, how they consume broadcast,” Mr. Woolmington said, suggesting the shift to strategic planning may catch many TV players off guard. Among other things, he said, there will be a greater push away from demographic targeting, which is largely standardized across the industry, to more psychographic targeting that is based on subjective criteria that frequently come from proprietary agency or marketer research.
As slippery a slope as that might be for the TV industry, Mr. Woolmington said it is both logical and inevitable.
“If you’re using demographics instead of psychographics to target, you can be 50 percent off the mark,” he said. “We’re not living in a world where 80 percent of the population is buying Miller beer each week. But if you look at how TV is targeted and bought, you’d think that was the case. That has to change.”