WPP WPP PLC

By Alexandra Bruell 

Ad giants WPP and Omnicom are racing to tap into marketers' growing digital media budgets by promising the best technology tools and analytics and catering to clients' desire for increased transparency in the fees they are paying.

That battle is getting testy, as recent internal communications reviewed by CMO Today reveal.

As part of a recent reorganization, WPP media agency network GroupM bundled data analytics and digital services, including search, social and automated buying teams, calling the resulting offering "completely open and fully transparent."

GroupM rival Annalect, Omnicom's central digital buying and data unit, quickly moved to arm its people with talking points in case clients ask about its competitor's revamped offering, according to a document circulated among Omnicom staffers. Annalect also used the opportunity to express confidence in its own approach and point to recent accounts that switched over from GroupM to Omnicom.

"It is noteworthy that the (GroupM) reorganization comes several months after losing ( Volkswagen) and AT&T -- two large, long-standing accounts -- to the data driven approach of Omnicom," the Annalect document said.

In the memo, Annalect touts its own proprietary tools and describes mPlatform as a "game of catch-up," saying GroupM's approach replicates what Annalect has "been doing for years."

The Omnicom memo describes WPP's investment in media companies and ownership of data as a "known conflict of interest, noting that "mPlatform will prove to push these conflicts to the forefront for clients." The document doesn't spell out the specific alleged conflicts.

Some ad industry executives have been critical of agencies that do media buying but also have investments in media companies, data providers and advertising technology companies, saying that can compromise their objectivity. WPP has investments in Vice Media and ad tech firm AppNexus, among others.

"If you look at everything within [mPlatform], it offers the power of choice," Mr. Gleason said in an interview. He called that the "opposite of a conflict of interest."

In the document, Omnicom said WPP is trying to create a "new walled garden of data" that will rival the media and data platforms of Google, Facebook and Amazon. Walled gardens typically refer to businesses that require advertisers to play by their rules, including adopting their metrics and using their data and buying tools. (WPP has previously acknowledged that it considers Google and Facebook competitors.)

Annalect's strategy, by contrast, has been to link up with the big tech companies -- creating "direct linkages to walled gardens" to access "rich consumer data profiles," the company wrote in its memo. Annalect also claims to have access to "person and household based identity data" through its partnership with Neustar.

GroupM's Brian Gleason, who was recently appointed CEO of mPlatform, obtained the Annalect document and distributed it to senior executives. In his correspondence, he criticized Annalect for being "100 percent dependent on partnerships," especially for its use of Neustar. A private equity group recently agreed to acquire Neustar.

"This creates a great deal of risk when your entire strategy is completely out of your control," wrote Mr. Gleason.

GroupM, like Annalect, is trying to persuade clients that it is objective. "Our dataset is unbiased, deterministic and rigorously curated for freshness to account for ever-changing consumer interest," Mr. Gleason wrote.

Mr. Gleason said in the interview that the mPlatform initiative isn't totally new. "We've been on this path for quite some time," he said.

Addressing why Omnicom chose to send its memo, a spokeswoman for the company said it was standard practice "to provide background perspective and opinion to our agencies whenever there is a significant announcement - whether it be from media vendors, measurement companies, adtech platforms, or our competitors - about which our employees and clients may have questions."

Write to Alexandra Bruell at alexandra.bruell@wsj.com

(END) Dow Jones Newswires

January 11, 2017 16:16 ET (21:16 GMT)

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