Newsmaker: Aegis global CEO on dancing around the dark arts

Paul McIntyre
By Paul McIntyre | 29 September 2015
Aegis global CEO Jerry Buhlmann.

This article first appeared in AdNews in print. Click here to subscribe to the AdNews magazine or read the iPad edition here.

Dentsu Aegis Network global CEO Jerry Buhlmann says the “TV stack” is changing fast and the big push from his group is understanding how it all feeds into client-side digital transformation strategies and ultimately e-commerce. He also has a careful dance with Paul McIntyre around Aegis’ position on media value banks and arbitrage.

Let’s cut to the chase. If you’ve been on the street this year, you might have heard the grumblings from rivals of Aegis and its media agency brands like Carat and Vizeum that the Denstu-owned media group is a lead protagonist for aggressively playing arbitrage with ad inventory and using advertising “value banks” from media owners as part of its operating model.

Given GroupM’s troubles earlier this year, it’s a prickly subject to tackle with the global CEO of one of the biggest media agency groups in the world. And Buhlmann is clearly reluctant to be drawn into a hot zone.

But in a nutshell, Buhlmann doesn’t outrightly reject the assertion that in some markets trading either free media inventory or buying and selling ad units is part of the group’s operating model, although he has plenty of caveats.

“The broader analysis is that we will look at lots of ways to get value from media owners,” he says. “And if you’re in a market where media owners give free space, we’ll take free space.”

So do Dentsu Aegis Network companies monetise that free space?

“It depends on the contract. I’m not going to dive into details of what our top markets do in terms of how they transact with media,” Buhlmann says.

“It’s about getting value and getting content so we’ll transact in ways to get value and content and what the most appropriate way is because it’s a long-term relationship.

“There’s lots of good ways of getting value and inventory from media owners in an efficient way which gives them the right revenue. How we translate that into how we transact with our clients is in a transparent way. The key thing is you have to have a transparent contract with your clients in the way you trade and transact on their behalf. That’s number one. And then compliance.”

Buhlmann is not inclined to engage further in what some might call the “media dark arts”. So, we press on to bigger picture trends like the much discussed global media buying review frenzy by major brands, which some estimates say is upward of US$20 billion. Others have it as much as $30 billion. Buhlmann has an interesting take on what’s driving this global media review activity.

“I think it’s two things,” he says. “One, is a lot of clients are looking at the emergence of the digital economy and they want to understand e-commerce and digital engagement in much more meaningful ways. They need more help and are feeling much more challenged and therefore they’re making big decisions about how and who they want to work with, going forward. 

So, you have a confluence of big changes in the market but I think that’s driving it more than anything else.”

Another, is the rapid change in TV and video and how all that leads into broader digital transformation strategies inside client companies. “The fragmentation of the TV stack and the growth of social, mobile and video - they’re all growing 50%-plus,” he says.

“They’re going to transform the way you operate. There’s huge growth in programmatic and a much greater ability to target. The strength of e-commerce is driving the digital market very rapidly. So, in the UK - probably the most developed e-commerce market in the world - next year, more than 50% of all media will be digital. That’s huge, that’s a big tipping point.

“So, the whole model of what agencies deliver for advertisers is changing. Advertisers’ businesses are threatened by significant disruption and therefore at the moment, they need good quality help on how they can get far more out of their media, how they can manage content better and how they can create an audience that has value. That's what I think advertisers are looking for.”

Buhlmann is not down on TV but the planning matrix is increasingly complex. “Let’s be clear, television is extremely strong,” he says. “It isn’t a particular loser at the moment, but you will, of course, see convergence driving TV closer together. And, right now, how we plan TV is very different.

“We have to integrate search and TV. You have to integrate video into TV. You’re looking at the links between call centres in the TV stack. They’re all coming closer together, which means you have to have the skills end-to-end in terms of insight through to e-commerce and be able to manage where the data throws off in a more meaningful way.

“That’s massively improving the ROI, the ability to measure ROI. And at the same time, it’s creating discrete, unique audiences that do have a value to advertisers. There, I think, is a big development that we’re going to see in the coming years.”

This article first appeared in AdNews in print. Click here to subscribe to the AdNews magazine or read the iPad edition here.

 

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