Commentary
Irwin Gotlieb And The Fine Art Of Being Transparently Nontransparent
- by Joe Mandese @mp_joemandese, March 14, 2013
Not that he needs my help, mind you, but I'd like to come to the defense of Irwin Gotlieb. You know, the most powerful man in media. Or at the very least, the most powerful man in our little
world of media-buying -- and by extension -- real-time media trading too. Gotlieb, of course, is the global chief of WPP’s GroupM and influences gazillions of dollars in brand spending across
every major media platform, but he’s gotten himself in a little trouble for doing what we should all admire in an industry leader: Being honest. The problem is that he’s being honest about
something many in the industry consider taboo, and would just as soon sweep under the rug, keep mum about, or simply look the other way: the lack of transparency in some media-buying practices.
Actually, it is one of the things I admire about Irwin in particular, and GroupM and WPP in general -- that they are 100% open about being closed. Or to put it another way,
absolutely transparent about being nontransparent. Not only are Irwin and his colleagues candid about it, but they actually tout it as part of a unique and differentiated business model that sets
WPP’s organization apart from the rest of Madison Avenue. And honestly, that’s not dishonest. What’s dishonest is the people and organizations in our industry that pretend nothing is
opaque -- that even in this era of procurement, corporate oversight and Sarbanes Oxley -- all the cards are on the table for everyone to see. It just ain’t so.
And
by the way, it’s not just agencies. I believe marketers are among the most dishonest, because they are lying to themselves if they believe they can get the kinds of services -- indeed the kind
of talent to satisfy the services they demand -- for the measly margins they’ve come to expect of their media services shops. The math just doesn’t work, and if they can’t make a
profit directly from their clients, they have to find another way to make it work -- otherwise their clients’ businesses will suffer, because of the lack of resources to service them
properly.
In the old days, people simply looked the other way when agencies arbitraged their clients’ budgets -- or at least their market buying clout. Now they
have to do it in the shadows, or risk the wrath of industry peers, or snarky insider bloggers. That’s what happened earlier week when Gotlieb sat on a panel with the other big agency media
chiefs at the 4As conference in New Orleans, and he quipped, “it doesn’t say in Genesis that everything has to be fully disclosed.” Gotlieb was responding to a question from
moderator David Verklin who asked whether agencies were putting themselves or their clients first with trading desks. Not surprisingly, that set off a firestorm of snarky criticism from industry
bloggers, including the Business Insider’s “Head Of
World's Largest Ad Buyer Says Not Everything His Agency Does Should Be 'Fully Disclosed' To Clients.”
Don’t get me wrong. I personally don’t
agree with WPP’s proprietary approaches and penchant for arbitrage, but if you’re going to operate that way -- and if it’s okay with your clients and your other business partners --
then what’s there to be ashamed about? It’s just another business model.
So kudos to Gotlieb for having the chutzpah to say it out loud, and for being
transparently nontransparent. And of course, for giving us something to write about.
4 comments about "Irwin Gotlieb And The Fine Art Of Being Transparently Nontransparent".
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Joe Mandese is the Editor in Chief of MediaPost. You can reach Joe at joe@mediapost.com.
Advertisers with huge budgets should have a hard time getting a great price for media. Sellers can see them coming from a mile away --- they know the giant conglomerate needs lots of inventory and they can work that to their advantage. Further, sellers are disinclined to give a big discount to anybody who is going to buy a very large slice of their inventory. That is how the media marketplace would work without the genius of Irwin Gotlieb. His clients get great prices for every kind of media inventory because he is the industry genius for understanding inventory as a supply/demand equation and always making the equation tip in the favor of his client's needs. Uh...has anybody noticed how the giants of digital industry publishing are now giving away their inventory in an open bidding environment where they have surrendered control of the price to the buyer? I think there is a particular advertising titan who has had a lot to do with that development but his name is non-transparent :-)
You can add CLASSY right next to honest, Joe. When David Verklin quipped about why there were still seven white guys on the stage, to some sheepish laughs from both the panel and the audience, Irwin Gotlieb was the only one to go back and address the question, and discuss diversity in leadership at WPP.
23 years ago I was completing a month-long media training program (with a class of about 15 other new hires) at DMB&B (now MediaVest) in NYC. Irwin, who ran the broadcast buying group, was the closing speaker.
After his presentation, I asked: "When you buy for P&G in the upfront, who owns and allocates the inventory -- DMB&B, P&G, or the individual brands?". He paused, smiled, and said dryly: "It's not really clear". Then he winked at me and went to the next person's question. That was the moment when I knew that there was real money to be made in the media business...
I think it would be more interesting to hear from a panel of WPP's clients, to understand their perceptions of non-transparency and why this is okay with them. In ANA surveys, clients say one of their biggest concerns is lack of transparency, but that doesn't match the success of WPP. The author is 100% right to say that any client who thinks they can get stellar service while paying at or below today's "going rates" for media services is naive. A buyer who can truly get below market net rates deserves to be paid for his/her talent. But the client deserves to know what that payment is. At the end of the day it is the client's money.