MEDIA FORUM: Will Rupert Murdoch’s global ad outfit succeed? Are advertisers ready for the global media deal? It’s not exactly a new concept but, in the past, things have been patched together on an ad hoc basis. Now News Corporation has s

Mars has done it. So has Nike. And Procter & Gamble. And the surprising thing is that they all did it almost four years ago, within months of each other. We’re talking global media deals - and, in particular, deals with Rupert Murdoch’s News Corporation. The conventional wisdom is that these things are like buses. You wait for years and then three come at once. Well, now we have to stand that conventional wisdom on its head. A regular service is on its way.

Mars has done it. So has Nike. And Procter & Gamble. And the

surprising thing is that they all did it almost four years ago, within

months of each other. We’re talking global media deals - and, in

particular, deals with Rupert Murdoch’s News Corporation. The

conventional wisdom is that these things are like buses. You wait for

years and then three come at once. Well, now we have to stand that

conventional wisdom on its head. A regular service is on its way.



Last week, News Corp created a global advertising division, News Corp

One, which will offer advertisers a one-stop shop for deals across the

company’s properties. There are more than 35 ad-supported operating

companies in the Murdoch empire, stretching from the Far East (Star TV),

Australia, through the UK (Sky and News International) to the Americas

(the Fox TV and film operations).



The New York-based unit will be run by Kayne Lanahan, previously the

media director of the Omnicom-owned agency, Merkley Newman Harty, and

formerly manager of entertainment and sports broadcasting negotiations

at Coca-Cola. A team of three will report to her.



It looks impressive, but will it work? Are we really going to see a lot

more of the global deal? The problem in the past has been

structural.



In theory, advertisers were increasingly centralising bits of the

marketing function, either on a regional or a global basis. That

supposedly meant that they not only had a detailed overview but an

ability to derive central strategies and the budgets to back them.



The reality, though, has not quite matched up to expectation. Until

recently.



Clients are getting there. And where advertisers go, agencies -

especially the big networks - will follow. The spotlight has now fallen

on media owners.



The big problem everyone faces is the not-invented-here syndrome. Local

bosses in any multinational have unremitting profit and loss

responsibilities.



And when their jobs are on the line, getting them to think outside that

box is next to impossible. Why should someone in charge of a UK

newspaper finance the weaknesses of an Asian television channel? Or why

should some of a German marketing budget be used to finance a Hollywood

film tie-in?



To work, global deals must be driven (on both sides of the fence) by

companies with good answers to those questions. Or, failing that, the

willingness to knock heads together. News Corp says it is ready. So do

advertisers. Are they kidding themselves? Will global deals happen on a

regular enough basis to justify formal structures like News Corp One?

And where do agencies fit into this?



That rather depends, Paul Woolmington, president of media operations at

Young & Rubicam in New York, argues. ’You have to applaud this

initiative.



This is the way large media groups have to go. But I think it will only

really be of interest to the largest advertisers and agencies and the

reason it is timely is because innovative clients and agencies have also

stepped up to the mark. We have executives empowered to make these deals

happen - and agencies should have nothing to fear, provided they

approach it right. Media owners will only go direct to clients if they

don’t get the right response from agencies,’ he says.



Woolmington believes News Corp will take a sophisticated approach -

discussions aren’t going to be just about discount, share of spend and

loyalty incentives.



They will be about partnerships that can deliver broad communications

goals. He has only one caveat: this group must have real teeth if it is

to deliver across the group’s properties.



Paul Longhurst, the executive media director of Ammirati Puris Lintas,

agrees. ’The client may use all or most of these media vehicles

anyway.



The ability to leverage that centrally is a step forward. Yes, of course

discount comes into that, but it isn’t the whole or even the main

point.



This will not be about discussing the price of a page in the Sunday

Times.



The attraction is the chance to share strategic issues with people who

can see the big picture. But this sort of thing will only apply to the

big advertisers and the big advertising networks. That’s why we see it

as a competitive advantage.’



Ron de Pear, the executive vice-president, media, of JWT Worldwide,

says: ’Five years ago, we were talking about mergers between the big

media owners and about the global and regional opportunities that might

emerge. There have been few opportunities up to now. Whether people are

ready depends on there being a person whose job is to take

responsibility for this happening.



That’s the same whether you’re an advertiser, agency or media

owner.’



What about the benefits? Sometimes they seem a little vague. ’If it was

just about cost there would be little incentive from the media owner’s

point of view,’ de Pear argues. ’It has to be about putting together

genuine communications packages. It’s about taking an idea and

expressing it to the maximum number of consumers. The prime example is

what Kellogg’s did with the Mask. It ranged across a number of things

such as sponsoring the programme and appearing in the cartoon to on-pack

promotions.’



Most commentators say the new venture’s likely success can’t be judged

until they see the detail. So far, according to Charlie Varley, the

marketing director of Optimum Media Direction, there are many more

questions than answers. ’The media industry has been talking about

global deals for the past three or four years and agencies have always

insisted that they’re ready. Now we’ll see. I think a lot of the

smoke-and-mirrors operations will be found out. I’d say that most - if

not all - the big networks are well placed.



’But what happens if News Corp decides to pitch it directly to

clients?



It could make for some interesting conversations. Murdoch might identify

12 clients he can work with at a global level. How are they chosen? From

the top down or from local offices up? And what happens if he offers a

car company a five-year exclusive deal? It might work well for New York

but not look so good for London and Hong Kong. We’re ready - but it will

be very interesting to see what conflicts of interest this throws up.’



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