As the North American CEO of MEC, a media buying agency, Lee Doyle controls about $5.7 billion in advertising dollars for clients such as AT&T, Campbells Soup, Paramount and Citi. Spend an hour watching TV or surfing the web and you're watching ads that Doyle's people have placed. He's one of the most powerful people on Madison Avenue.
Doyle recently sat down to answer a few questions from BNET about the burgeoning power of Google (GOOG) and Facebook, and whether the internet will eventually put him out of business they way it did newspapers.
BNET: Where is MEC at right now?
Doyle: I believe we're at about 850 employees in the U.S. Billings, I think we're in the neighborhood of $5.7 billion, just as MEC. And we're part of GroupM, which is four media agencies [all owned by the holding company WPP (WPPGY)]. In many markets we go to market as "GroupM." I can't talk about revenues. We only declare revenue at a company holding level.
BNET: Is there a general percentage that media billings work out as, as revenue?
Doyle: Yes, but it varies by media type. Digital is far more labor-intensive than network television or local television.
BNET: Why is that? That doesn't make any sense, if it's online it's supposed to be easier.
Doyle: It's not. You're talking about so many more units per dollars. In network TV you can go buy a single unit in the Super Bowl for $3 million. Three million dollars in the online world would probably involve hundreds of publishers. You've got a lot of real-time management in the online world.
BNET: Tell me about "demand-side platforms," because I get the impression that clients and the outside world are not well-educated about them.
Doyle: Their are lots of pieces that clients don't fully understand. Basically DSPs help agencies buy online inventory through multiple exchanges. There are lots of different sources of inventory we can buy from. It's a software tool that allows us to do that. It gives us a single way to buy across these exchanges in just about real-time. It's largely, almost auction based, but not an open auction. The biggest ad network is Google.
BNET: There was a recent story alleging that Publicis (PUB) had a conflict of interest with Google through its DSP, and that Publicis was improperly receiving some kind of compensation from Google as a result. Are you familiar with that?
Doyle: I'm not fully aware of that but I do know that they have a deal with Google and that they are using Google as their DSP platform.
BNET: What do you use?
Doyle: WPP owns a company called 24/7, so we use their technology. The other issue is Google seems to own more data than anybody in the world and we're concerned with protecting our clients' interests, and we feel that having our own technology is a way to do that.
BNET: It seems to me there is no real reason why Google can't create an online tool that would allow me to buy all types of media right from my laptop. What is happening to newspapers and television might eventually happen to media agencies, like MEC, surely?
Doyle: There is a role for cheap inventory and cheap exposure but there is also a role for more high-profile exposure. So even in the online world we're not looking to channel all the client's spend through a DSP platform. I almost think of it as "Hamburger Helper." The majority of spending in the U.S. is still to change brand health metrics and people's attitudes toward a product. We still do a lot of things direct with publishers to get the high visibility positions, like homepage takeovers that perform more like television. For low-demand inventory in television there's probably an opportunity, but in the really high-profile opportunities, where there is some kind of brand support in the program as well, those deals still require people-to-people communication.
BNET: Really, is that true -- a majority of spend is not about sales, it's about polishing the brand?
Doyle: Well, with the ultimate goal of sales. But how you polish the brand, that's one of the challenges in the online world. How can you do that with a standard banner? So much time spent among consumers is shifting to the web. Why isn't spending shifting proportionately, tends to be one of the questions among a lot of the online vendors. And the answer is, Because TV still does things that we can't do as effectively on the web.
BNET: Everyone agrees that banner ads are not very effective.
Doyle: They serve a certain role. It's reminder advertising.
BNET: Is there anything on the web that's working really well?
Doyle: Where the web is really effective is in high-consideration purchases where consumers want and need a lot of information. Things like cars. The challenge on the web is how do I get people's attention for low-consideration items, like a new candy?
BNET: Clients and agencies are obviously very interested in buying media on Facebook but I heard that Facebook is not that easy to deal with, for media agencies.
Doyle: Facebook has absolutely incredible scale. The challenge is how do we harness that scale? How do we create a program that leverages the full scale of Facebook? They put their user experience first and foremost. I've not heard our people complaining about that [Facebook's ad sales staff].
BNET: What about ad performance on Facebook? People don't like clicking on ads in Facebook, do they?
Doyle: There are some successes within Facebook. There's been a lot of e-commerce growth within the Facebook platform. People don't like to leave Facebook, they like to stay within that universe. AT&T has had a great success using it as a customer relationship management channel. You got a problem, you go to Facebook and you'll get a response pretty quickly.
BNET: I'm always curious about client conflicts. You probably handle so many clients that some of them compete against each other yet on the media-buying side no one seems to care. Why is that?
Doyle: Actually, one of our biggest challenges to growth is client conflicts. In a large agency like this there are only so many areas we can pursue for new business. Clients are sensitive to it. They are perhaps less sensitive than they are in their creative shops. In the media world, when you roll them up into parent companies the television landscape has essentially consolidated down to about five companies so I think it's advantageous to clients to make sure they've consolidated their leverage and scale. Even the biggest clients alone don't have that leverage and scale.
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