The decision by Omnicom Media Group to pull all its clients’ advertising from Channel 5 for the last six months of the year has once again raised the question of whether media agencies have become too powerful.
Three buying groups control nearly two-thirds of the UK advertising market, and their stranglehold is spreading to online and mobile markets too. These groups regularly pull their advertising from media owners, either to gain preferential rates or to play one broadcaster off against another.
OMG’s advertising blackout through its central buying house, OPera, will keep up to 90 of the UK’s top brands – including McDonald’s, Renault and The Co-operative – off Channel 5 during its busiest, Big Brother-led period.
The dispute has raised fears of what can happen when the now centralised buying unit ride roughshod over planners and clients’ interests.
OMG’s recent move has been widely interpreted by the industry as the likely result of agency over-trading, with the group getting its numbers wrong and failing to spend enough money on ITV to honour its agreement with the broadcaster.
Philippa Brown, the chief executive of OMG, flatly denies such speculation: "That is not the reason we have entered into a groundbreaking partnership with ITV. We put our clients first and evaluate all potential deals versus the needs of our clients. The deal with ITV ticked all the boxes."
The development marks the latest in a string of advertising blackouts ordered by media agencies. Last year, WPP’s Group M very publicly fell out with Channel 4; in 2012, Havas Media had a spat with Channel 5 that resulted in 12 clients being off-air. And many lesser-known disputes happened in-between.
Group M controls 35 per cent of UK advertising, while OPera and Publicis Groupe’s VivaKi control about 14 per cent each. Richard Dunmall, the managing director of advertising at Bauer Media, is not overly concerned, believing the role of agencies were undervalued until the explosion of digital changed everything and gave them the recognition they deserve at the top table with clients.
So, are agencies unfairly bullying media owners?