MEDIA: SPOTLIGHT ON MAGNA - Roy Jeans adds clout to IPG's media negotiation unit Magna

Jeans' appointment shows IPG is committed to Magna's growth, Alasdair Reid writes.

The combined non-broadcast media billings of Universal McCann and Initiative are around £380 million - so even if Roy Jeans improves buying performance by less than 1 per cent he'll just about justify his salary. So he's on to a winner there, isn't he? Last week, Jeans was appointed as the UK managing director, non-broadcast media, of Interpublic's centralised media negotiation unit, Magna, where he'll join Mick Perry, who's been in charge of broadcast media since its inception two years ago.

The realisation that IPG is committed to the evolution of Magna shouldn't be too much of surprise, really - but, strangely, it is. The vague assumption has always been that Magna, in the UK at least, existed merely as some form of lip service to a theoretical principle. In fact, the perception has always been that it was originally set up in a hurried response to a global pronouncement from IPG headquarters in New York - and for months, although Perry had a new title, there was little of substance happening in operational terms.

Sceptics have always argued that the UK market is too sophisticated for crude buying muscle to make much impact. And they have been especially sceptical about whether non-broadcast media, especially press, can be leveraged in this way.

So this latest development has clearly knocked that sort of talk on the head, hasn't it? First, it suggests Magna has been effective to date; and second, that the time is ripe to take it on a stage. And where does this leave the rival groups: Publicis; WPP and Omnicom?

"This is the next stage for us in maximising opportunities for IPG clients in the UK," Jeans says, although he declines to put more flesh on these bones. With good reason, say the sceptics. It doesn't help that the signals emerging from IPG are sometimes contradictory. For instance, while the Magna press release talks about "adding muscle" to the media process in the UK, Magna in the past has maintained that it is not primarily about extracting extra discount from media owners. Yes, price is a component, but it's also about "access" to opportunities and about "added value".

They would probably admit, though, that Magna is also an exercise in putting down markers. Group negotiations are already paying big dividends in the US and Germany and, in time, they will here too. IPG would probably be less happy to agree with the cynical view put forward by some media owners that agency consolidation was sold to clients as not only inevitable but also beneficial. Now they have to pretend to be working towards delivering the benefits.

True, IPG is not alone. Negotiations for the two Aegis agencies, Carat and Vizeum, have been handled centrally for many years now but that arose out of slightly different historical circumstances. It is more a case of big brother (Carat) looking after little brother and merely absorbing its billings for negotiation purposes.

Other holding companies have also talked about this, most notably WPP, but little evidence of progress has been manifest to date. There's known to be local resistance to the idea within WPP's media agencies and, given its past reluctance to bang heads together (in accelerating the development of the MindShare "house of media" proposition, for example), we are not likely to see a new group structure emerge overnight.

So what's the reality here? Surely the people best placed to register the effects of group media negotiations are the media auditors. "It's an inevitable development in order to deliver the promise of volume advantage to clients and combat consolidation on the media owner side but it's a long way from being perfected," Martin Sambrook, a global account director at Media Audits, says.

Yet he adds: "I struggle to understand how it works in terms of tangible benefits and how you demonstrate that to clients. There are also client conflict issues here that need to be discussed because, inevitably, we are talking about advertisers that will be in competition for particular slots."

And what of the media owners themselves? Graham Duff, the chief executive of Granada Enterprises, states: "In recent years, as each large advertising group buys another large advertising group, one of the ways they have rationalised that is in terms of the media opportunities that will arise. It's a strategic position to take and you shouldn't underestimate the importance of that. But, apart from at Aegis, I see very little that has actually been done to date."

Diplomatically put. But how will print owners take this latest development?

After all, press is even less of a commodity business than TV. Len Sanderson, the Telegraph Group's managing director of sales, believes that personnel is a more important issue than structure at this stage. "In Jeans, they have chosen a guy with a good deal of pragmatism and common sense. They have chosen wisely," he says.

But, in reality, will there be anything on the negotiating table when Jeans visits publishers? Sanderson concludes: "I'm as interested as anyone to see what this actually means. From our point of view, it would be interesting if it involved talking about opportunities there are around the margins rather than talking about normal transactions for individual clients. Say it was a project involving everything we have - print-based media and online as well as database. We could certainly look at a different remuneration level for an agency based on that. But will they be able to bring their collective muscle to bear in terms of rates? That's unlikely."

Topics