Sony, Dentsu, a flap and a flip-flop

Marion Arathoon & Anushree Madan Mohan

MUMBAI: Denial may be the better part of valour. Or the plain truth.

But on the heels of Sony-Dentsu denying that there was ever a deal forged twixt the two involving Dentsu underwriting cricket ad-time inventory for certain properties, a flurry of questions has surfaced from the ad business.

Such as, would this alleged Dentsu deal really have been unprecedented in nature - or has it been around in different shades in the media business?

And wasn’t it anti-competitive in itself to use lobby power to squelch any such underwriting deals/rumours, related to what some may see as mere business evolution of a fragmenting TV market?

Isn’t this tantamount to cartelisation on both sides, query some.

Sure, hypothetically, a Dentsu - via any alleged deal with a broadcaster - may get ‘special’ discounts by bulk-buying cricket inventory and then selling it piece-meal to advertisers outside their agency roster.

But in the same coin, don’t mega media-buying houses also implicitly leverage their buying muscle to get special deals for their big and other clients? ask some observers.

“Even if agency-specific deals are on paper frowned upon, don’t many media agencies overtly or covertly swing special deals with media owners based on their ‘potential’ buying power? So, are some media houses safeguarding potential threat to their own interests and commissions by rallying behind a body?

What’s to stop any interested media agency in the future from picking up huge coveted broadcast properties and retailing the same using the backdoor route—via `other’ fronts like independent marketing agents, or new agency fronts?’’ queries one media specialist.

A sense of déjà vu

A critical poser: if a name bigger and with more media-buying fire than a Dentsu was involved in such an alleged deal, would the Advertising Agencies Association of India (AAAI) or any body even have the teeth to actually stop them?

Also, a media veteran states that various, less than traditional media deals here have failed to come under media scrutiny.
She says: “When the last World Cup took place, Mindshare scooped most parts of the ad inventory on the basis of an ‘understanding.’ Madison has also had tie-ups with various channels on prized entertainment properties.

Of course, they didn’t market it to advertisers outside, but they did monopolise the business. Unfortunately the Sony-Denstu understanding came under the media spotlight, and both parties had to scrap it.”

Adds another media light: Such deals always involve large amounts of inventory, high value to be utilised in a short span of time. But there is no confidentiality in this industry. Even if you keep three filters in between, or you keep everything at an arm’s length, everyone would get to know about it.

But would they want to talk about it? For example, a sports-content major has formed alliances with agencies and acted as a marketing force, for prized properties.

There’s another charge by certain industry professionals: that bodies like the AAAI are not in step with the times.

They cite the body’s active resistance to changing remuneration systems in the early days; while the world was moving from fixed 15% ad commission on media placement to ad fees, advertisers like Videocon were pilloried for daring to have their own in-house agencies or wanting to pay in fees, cites another professional.

The bodies have a point, too

In western markets, media conglomerates have partnered with broadcasters over prized exclusive media properties. Replies Sunder Swamy, AAAI chief:  “Well, this is India. We work differently, and if there is anything that contradicts everyday business practices, we would need to be kept abreast of what’s going on.”

Says Punitha Arumugam, CEO, Madison Media: “A media buyer cannot also be a media supplier; that’s a different model.”

Shashi Sinha, president, Lodestar Universal, defends both AAAI and IBF. “Both are respected bodies and they have every right to question the actions of certain members, if the actions have repercussions on the industry as a whole. I do not think that their attitude is partisan; they just needed to be kept in the loop of industry developments.”

Meenakshi Madhvani, managing partner, Spatial Access Solutions points out, “If you asking me if such a deal is in violation of industry ethics, the answer is yes. The advertiser, at the end of the day, depends on the media to give him a completely unbiased recommendation.

If the agency has committed upfront a certain guarantee to the broadcaster, it has to fulfill that commitment, whether or not it is relevant to the client.

The client interests ought to be primary for any agency, but in such a scenario, there would be a conflict of interests.” She adds: If there’s a flip-flop from Denstu and Sony’s side, it seems to be in direct response to the pressure of the two bodies-AAI and IBF.

I think that we cannot hold the two forces in judgement, because they are best working for the larger interests of the industry. I just hope that they get more teeth in such matters, for a lot of media deals go by without this kind of attention,”

Ultimately, there may be no even keel between what the industry demands and what its players feel they need to do to make money in a margin-squeezed world, in the grip of fragmenting media. End of the day, the same yardstick should be used to judge anti-industry practices across both sides of the fence.