WPP’s new deal with Buddy Media—in which the company will become the “preferred social ad management partner” for GroupM, WPP’s media-buying arm—could signal an era of consolidation in the social media ad buying world.It is the second recent deal in which a large ad agency holding company has locked in a relationship with an agency that specialises in Facebook ad management.
Further consolidation won’t be cheap: With valuations in the social media/tech sphere currently through the roof, agencies like TBG Digital, AdParlor, and Adaptly, which also manage media buys on Facebook, Twitter, and other social media, are likely to price themselves expensively.
WPP’s Buddy media deal could be earth-shaking: WPP spent $200 million on Facebook in 2011, and CEO Martin Sorrell expects that to rise to $400 million this year. With Sorrell wanting to see his $5 million stake in Buddy Media pay off, there will be pressure on GroupM buyers to move their business from rival agencies—TBG, AdParlor, Adaptly, Blinq Media, 22Squared et al.—to Buddy Media and the Brighter Option unit it bought in February. Buddy Media CEO Michael Lazerow believes this will eventually make his agency the single-largest Facebook ad management platform.
But the Buddy Media deal isn’t exclusive—meaning WPP’s various buyers will still be able to place Facebook ads through rival agencies if they or their clients want to.
Those agencies have their own relationships with clients and, in terms of Facebook ad buying, they have larger staffs and (arguably) greater expertise than Buddy Media does (the Brighter Option buy only gave the company 21 staffers; TBG, for instance, has about 140 employees, of which 90 are analysts).
In other words, there will be fierce resistance in some quarters.
- The deal comes after Omnicom made a similar non-exclusive pact with Blinq Media.
- And Interpublic Group, famously, owns a stake in Facebook.
Clearly, Madison Avenue isn’t just sitting idly by while all these new startups siphon off Facebook ad-buying cash for themselves. That signals further deals to come.
Business Insider Emails & Alerts
Site highlights each day to your inbox.