MediaTel: Google deals galvanise snoozing giant
The news that the two major agency systems, DDS and MediaBank, are planning to merge, had been on the rumour mill for a little while - but it stunned many when it was officially announced this week. Not least because the relationship between the two businesses had appeared to be about as warm as Mancini and Tevez.
The deal has to get past competition authorities in the States - and whilst enquiries will have been made in advance, that would seem no foregone conclusion. On the one hand the companies (largely DDS) take the vast bulk of the revenues in the market; but on the other the looming competition that could be cited is coming from Google - which has its own issues with the Senate right now.
Over the last few years Google has struck technology deals with a number of the network agencies; the business has many ideas about how TV might be traded; and launched a Google AdWords for video in beta this week. Threatening.
Meanwhile, bespoke DSPs are springing up left, right and centre; and direct competitors occasionally. Just this week Facilitate (the smaller Aussie pretender) has signed an agreement "to process all of the front-end digital workflow for all of Mediabrands' agencies on an exclusive basis globally, and in North America on a non-exclusive basis".
Through all this and over some years now, DDS has launched and re-launched its i-desk platform for digital and talked vaguely about APIs, while MediaBank has focused further on digital, but failed to convince outside the US to date. So the merger would make sense - the scale of DDS in the market and the greater digital pretensions of MediaBank, run by ex-Yahoo! executive, Bill Wise. (See Bill and DDS' JT Batson interviewed this week).
The stated objective of the new business, MediaOcean, is to create an open system (a huge step-change for DDS, which has been largely a "firmly shut system" for years) and emphasis is given to being "neutral" and "independent". Good points both - do agencies really want Google as their media billings platform in five years time?
Open systems have to be the way to go, but they come with risk too and some of the smaller competitors in the market may well see this as an opportunity to grow their businesses - as Facilitate were quick to note:
"With the stated objective of MediaOcean's OS project being 'to create an operating system through which any advertising agency can access any advertising technology, and orchestrate across all technologies globally', it would appear that the thinking of our two organisations is very much aligned."