WILL GROUPM SHAKE UP THE MEDIA INDUSTRY?
WPP’s GroupM is set to rustle some regional feathers
The formal arrival of GroupM in the MENA region and the appointment of Filip Jabbour as its inaugural CEO has piqued interest.
As the world’s largest media company in terms of billings, its presence in the region is sure to make waves, while its scale and negotiating power will be watched with interest by media owners wary of being hammered down on cost.
Serving as the parent company of WPP’s media agencies in the region – MediaCom, Mindshare, MEC and Maxus – GroupM will help accelerate growth of those agencies and operate as an aggregator of services. To what degree it will shake up the media scene is yet to be seen, but its impact will most definitely be felt.
“I don’t think it will ‘shake up’ the industry, it will make waves though,” says Asad Rehman, media director at Unilever MENA. “Increased competition in the industry never hurts anyone. If GroupM are able to enhance the quality of their game and product, the entire industry will stand to benefit.
“MENA is becoming an increasingly important region for businesses, so healthy growth of capability and skill-sets are always needed in such environments. On the buying front, some of the other agency groups like Omnicom and IPG are already buying as a group, GroupM will go on this journey now so it will be a process for them. We will also like to see their contribution to the overall state of research and general development of the industry in MENA.”
Nicolas Roux, regional head of new business at MediaCom, which is part of GroupM, states that when a company accounting for around 30 per cent of worldwide media buying share officially opens in the region, this is big news.
“Scale is indeed power in the media world and with the advent of GroupM in MENA it will mean that the four WPP media agencies have a significantly increased impact when it comes to negotiation and premium inventory,” says Roux. “Each agency still retains its own particular brand and intellectual IP, but from a trading perspective GroupM agencies are now re-enforcing their negotiation power and offering. GroupM though is not just about size and buying power. The consolidation of data, digital and research services such as Xaxis, Kantar and Keyade to name a few, will give GroupM and the four agencies unparalleled offering and a durable competitive edge in new technologies and the integration of data into the communication ecosystem.”
“Whether the market is shaken up by the formal arrival of GroupM really depends on what their mandate is,” says Andrew Phillips, director of marketing at Daman. “If they are here to consolidate the buying power of their media asset management agencies and change the relationship that agencies have with media owners, then there could be an evolution of the market, and everyone benefits. If they cannot break the practice of media pricing based upon individual client expenditure, GroupM’s media agencies will remain as autonomous profit centres within the group. The benefit they bring will purely be homogenising service practices and providing access to proprietary planning tools. I guess time will tell.”