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The Media Department Is Back

Ad agency Deutsch is famous for the double play: integrating media buys with the spots it creates for clients. But an upcoming campaign takes the practice to new heights. The shop has produced individual commercials for each media outlet where ads will appear, even specific episodes of TV shows. The strategy isn’t new, but the complexity involved in a cluttered media universe is mind-boggling.

Peter Gardiner, Deutsch partner and chief media officer, won’t reveal his client, but he says the initiative is solely due to the agency’s media structure, which houses creative, account planning and management departments together.

“This kind of connection is more difficult if you are not breathing the same air,” says Gardiner, taking a jab at the independent media shops spun off from large agency holding companies.

Deutsch’s media department, which was the norm 10 years ago, is an anomaly in an industry now controlled by a handful of gigantic media companies.

Yet a backlash is gently rippling through Madison Avenue. Suddenly, the buzz isn’t about big media agencies like MindShare, OMD and Zenith. Instead, it is all about well-integrated and creatively driven media departments, like New York-based Deutsch, Miami-based Crispin Porter + Bogusky, Santa Monica, Calif.-based Rubin Postaer Associates and Minneapolis-based Fallon.

Industry estimates claim one-third of media billings are controlled by independent media shops, approximately $90 billion in U.S. spending in 2004. But integrated media agencies, which account for two-thirds of billings, approximately $185 billion in the same year, could see that number rise, given the push toward integrated models.

Unbundling media planning and buying from account planning and creative may not be such a smart move, after all. For many media directors, the old-fashioned media department is gaining new cachet. “The media department is back, but we like to think it never really went away,” says Fallon Media Director Lisa Seward.

Integrated media operations have been thriving amid the turmoil of media unbundling and the wave of account consolidations at big media shops. Seward says the integration model suits clients who believe in teamwork. They see a media department that joins forces with consumer research as more likely to develop a winning ad strategy than an independent shop.

Still, the integrated approach isn’t without its tradeoffs, says Seward. She claims that big media shops have an “economic advantage” over traditional media departments: They can reinvest much of their profits and cash flow into media resources. By contrast, media departments must share their P&L with the rest of their agency.

“There is a huge challenge for integrated ad agencies to support a modern media operation,” says Steve Farella, CEO of independent media shop Targetcast, New York, who formerly ran media departments at Ammirati & Puris, Wells Rich Green, and Young & Rubicam.

“It is tempting to take profits from a good media operation and put them into the next great creative director,” Farella says, “instead of the talents and tools that a media department needs.” For him, that makes an integrated department difficult to rationalize.

Despite these caveats, Farella acknowledges that some media departments are breaking the mold. They make up for scale and economy with creativity, innovation and better synergy with the account and creative groups.

“If you think about it, it’s fabulous. It says we have great marketplace diversity.” But a one-size-fits-all approach isn’t right for everyone, he warns. “Clients are looking for an array of options.”

In fact, the marketplace is becoming so diverse, it is spawning new media department structures. Recently, giant ad agency Foote, Cone & Belding, New York, named Rich Gagnon worldwide president of FCB Media, a name the agency uses to differentiate its internal media department. Gagnon, who had been media director of the agency’s domestic media operations based in New York, describes FCB Media as a hybrid that captures the “best of both worlds.”

FCB Media is an integrated part of the full-service agency. Its media team works hand in hand with account planning and creative teams to develop all facets of their ad campaigns, from concept through media execution. Yet it remains a part of holding company Interpublic Group, so it is able to tap the resources of some of Interpublic’s big media networks.

For instance, Interpublic’s Magna Global buying unit handles media-deal negotiations that require the clout and scale of a giant media buyer. Gagnon serves on the Magna board. Interpublic’s Initiative Media unit was created when part of FCB’s media department was spun off and combined with Western International Media; it helps develop proprietary research, modeling and media-management tools. Many internal media departments could not do that without their own P&L.

“We’re really an aligned model,” explains Gagnon. “We’re partnered with the people at Initiative and Magna when we need to be. But, at the same time, we know there are benefits for our clients by having people culturally aligned with their accounts at FCB.”

FCB Media’s unique “aligned” structure may be a model that future media departments embrace, rather than the traditional standalone option of a decade ago. As clients and agencies search for the right mix of structure, resources and culture to deliver the best media buys for their brands, the integrated- media debate is key.

The biggest issue confronting all players in this new media mix is talent. How well can agencies compete for and attract the top media talent they need to remain competitive?

Recruiters specializing in the media-services industry say there is a huge demand for talented media planners, people who, like FCB’s Gagnon, boast a combination of traditional-media and digital-media experience. Before running FCB’s media department, Gagnon was head of the media operations for interactive agency FCBi.

“These days, agencies want the whole package: someone who knows traditional media inside and out, as well as someone who also knows new and interactive media,” says Amy Hoover, vice president of Talent Zoo, an Atlanta-based recruitment firm specializing in the ad industry.

Hoover says demand and salary requirements are being pushed up for all types of media managers. But those who can demonstrate media versatility are particularly desirable. “Online, interactive and integrated are on every job order request right now.”

As the industry begins fusing new and old media in a far more integrated fashion than they have done to date, diversity and flexibility will be critical.

“Dial back 25 years, and virtually all media was integrated in an agency. There was lots of very similar, me-too media thinking,” says Fallon’s Seward. “You’re not going to find that today.”