Media.Monks, the media agency network formed by Sir Martin Sorrell — founder of WPP and the agency holding company model — under corporate parent S4 Capital, has been noisy as of late, but for some of the wrong reasons. The latest addition to this presently grumbling assemblage of digital agency players — in the form of a new COO — could help get the company back into making a more harmonious noise.
It’s been widely chronicled that S4’s stock valuation has plummeted (it currently rests at under $1) as tech advertisers backed off their spending in 2023 (although it’s ticking up again) and that in response, the digital agency network laid off hundreds of employees globally to level off at around 8,000 staff populating 60 offices in 32 countries.
The problem it’s battling today is an internal fracas among founders of the various digital agencies, who are feeling the downward pressure of a depressed stock value — on which their compensation and payout is based. Several sources inside the network, as well as some no longer there, say it’s created fiefdoms due to the founders of those agencies being compensated in stock, which is currently far less valuable than when they bought in. They are said to be more concerned with protecting their own assets rather than pushing for the greater Media.Monks good, which is leading to operational confusion and materially impacting the network’s ability to deliver for its clients in a tougher marketplace.
And that’s getting in the way of the company’s goal to achieve a “unitary structure,” as S4 describes its optimal mode of operation. Over the six years since S4 was formed, Media.Monks has absorbed about 30 agencies — which analysts construe as too many acquisitions in too little time with not enough oversight to ensure their successful melding.
Sorrell spoke with Digiday but insisted on remaining off the record. Another source, who is an advisor within S4, explained that the company needs more time to iron out the wrinkles.
“Sir Martin assembled a group of companies that had in some cases contrasting cultures and different operating points of view,” said the advisor who declined to speak for attribution. “It’s hard — it’s not an easy process to put it all together and optimize it. And that’s the key term — optimizing it … Not everybody is used to collaborating.”
Jay Pattisall, vp and primary agency analyst at Forrester, noted that S4 has pursued a strategy of mergers rather than acquisitions. It’s an important distinction because the merged founders were compensated in shares rather than being bought out. That matters when those shares lose a majority of their value.
Dismal stock price aside, other internal sources said not enough effort has been made to ensure a smoother integration into the unitary structure.
“There was no core platform that was being built on top of Media.Monks itself,” said a second insider who also declined to speak on the record. “It’s a high growth startup that didn’t ever have the infrastructure to actually execute an M&A strategy. And the outcome of that is quite obvious. You’ve got a large ecosystem of discrete pieces who are externally being touted as single unitary structure, a single P&L and single brand. The reality is, there are over 30 brands internally. That’s been cleaned up a bit as we go, but still not nearly where it should be. There is no unitary structure, there is no single P&L.”
One former Media.Monks source said the company suffered from an immobility in decision-making because the varying founders of the absorbed agencies had differing points of view, alongside a lack of formal structure. And there was little guidance in terms of how the absorbed agencies would get integrated into the mothership. “When you start acquiring similar entities, you need to truly merge them together. And if you don’t, they begin competing with each other,” said the source.
Added the second insider: “All the things that make [Sorrell] great at doing deals make him an ineffective day-to-day tactical leader. Decisions aren’t made quickly if ever. There’s a tremendous amount of ambiguity and the way that the structure of the organization actually functions.”
That is most likely going to change, and soon. Less than a month ago, S4 hired a new COO in Jean-Benoit Berty, who takes over from Chris Martin, who was doing double duty as COO and head of Media.Monks’ data and digital media arm. JB, as insiders refer to him, is a 33-year veteran with considerable experience in the media, telecoms and ad sector and who, according to sources, has the chops to bring about the unitary structure the company wants to achieve. He was an 18-year veteran of consultancy EY until last fall, but also has experience at French consultancy CapGemini. He also advised WPP for 12 years, overlapping with Sorrell’s tenure.
“Although it is early days, I already see significant opportunities to develop the unitary, digital only, data-driven, faster, better, cheaper and more business model that S4 is developing around Media.Monks,” said Berty in a statement provided by S4. “Integrating into one brand isn’t easy, but the quality of Media.Monks clients and almost 8,000 people will ensure success.”
One analyst, who spoke on the condition of anonymity, contrasted the S4/Media.Monks experience with Brandtech Group, which arguably hasn’t acquired as many agencies as S4 but has seemingly integrated the varying operating styles and cultures more effectively into a single P&L.
Although Media.Monks is working to expand its roster of clients beyond a tech core, which includes virtually all the major tech platforms, the analyst noted that it’s not being invited to the “big parties” — big clients that are currently up for review, such as Amazon, VW, parts of Unilever and Nestlé.
Still, the internal advisor said he is working on expanding the client base beyond tech — it already includes work for such brands as BMW, Mondelez, H-P and others.
Color by numbers
IAB last week released the 2024 Digital Video Ad Spend & Strategy Report, focused on U.S. ad spend and estimates for digital video, including CTV, social video and online video. — Antoinette Siu
Some highlights:
Digital video ad revenue is expected to reach $63 billion in 2024, while CTV is expected to grow 12% to $22.7 billion next year. That’s 32% faster than the total media overall.
Together, CTV, social video and online video are expected to increase 16% in 2024 – nearly 80% faster than total media overall.
Social video is the strongest video growth category, on track in its second year to increase to $23.4 billion, 20% year-over-year growth.
For the last four years, share of ad spend shifted almost 20 percentage points from linear TV to digital video, which now comprises 52% of total market share.
Takeoff & landing
The Media Rating Council issued the first phase of setting standards for the measurement of out-of-home media audiences, as a step toward a common core of metrics across all out-of-home media, as well as comparability to other measured media.
Omnicom’s media agency PHD won luxury jeweler David Yurman’s media business covering North America, UK and France; the incumbent was mSix&Partners.
Personnel moves: Former 4As CEO Nancy Hill is retiring from full-service agency Marcus Thomas; taking over for her are president Scott Chapin and CCO Jamie Venorsky … Digital agency Hero Digital hired Brandon Rozelle to be its evp of strategy, coming over from Rightpoint where also oversaw strategy.
Direct quote
“We recognize that there are ongoing challenges related to reconciling divergent feedback from the industry, regulators and developers, and will continue to engage closely with the entire ecosystem.”
— Google’s statement when announcing it was delaying the deprecation of the third-party cookie yet again until 2025. For more about this, check out Seb Joseph’s thorough coverage.
Speed reading
Ronan Shields dug into the latest rumors that WPP might be in play, either in entirety or in pieces.
Antoinette Siu wrote about influencer agency Billion Dollar Boy’s move to create a membership program for creators that offers a host of fringe benefits.
Digiday’s newest staffer, senior marketing reporter Sam Bradley, looks at how brands are moving beyond just TV sponsorships in aligning with the upcoming Euro 204 soccer tournament, which is practically as big as the World Cup.
https://digiday.com/?p=542949
>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : DigiDay – https://digiday.com/media-buying/media-buying-briefing-media-monks-looks-to-settle-internal-infighting-with-a-new-coo/?utm_campaign=digidaydis&utm_medium=rss&utm_source=general-rss
