Digital Gabe
Cutting Edge Commentary On All Things Media

Is Disney Making Ad Buys Part Of Its AOR Selection?

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There’s a subtle game agencies have played for years when courting media clients to be their AOR.  Since larger agencies handle many clients who could also be advertisers of their would-be media client, they sometimes work behind the scenes to funnel ad spending placed by their account teams back to the media account.

While this seems like a cozy way to scratch each others’ backs, it’s tremendously unfair to clients whose ad budgets are being used to feed the reciprocity monster.  Just picture yourself as the CMO of a company whose budget is being spent on other agency clients (to the agency’s benefit), instead of where the media spending could do the most good for their business.  Sounds like a conflict of interest, right?

Up until now this has been an informal albeit shady practice.  But now it looks like we’re seeing this practice formally baked into an agency review.  At issue is Disney’s request (demand?) that the Holding Company who wins their AOR services require their sub-agencies’ other clients to allocate what is being called a “share shift” — to spend more of their respective ad budgets on Disney properties. This means that if client carmaker X spent 20% on Disney channels this year, the media spend would now rise to, say, 23% in 2020.

Because of this requirement a few HoCos have backed out of the pitch process, leaving Omnicom and DAN as the finalists.  Nobody knows for sure if the winning agency will actually comply with this ask, but even the idea of this practice being codified into an agency review is a bad sign for our industry.

 

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