Rumble on Mad Ave: Media Eyes Agency Turf

A new digital turf war is being waged between traditional ad agencies and media companies.

Conde Nast is now offering its creative services unit, CND Studios, as an agency for Conde Nast clients and/or any client, no matter where the ad buy is being made. In fact, Conde recently created content for Kenneth Cole’s website, Facebook page and YouTube channel (such as the spot above).

Hearst Corp. is reportedly closing a deal to buy the digital marketing firm iCrossing, one of the last remaining independent agencies with search expertise.

The reason, reports AdAge: publishers are increasingly being asked by advertisers to build and tailor digital ads that don’t conform to traditional display ad standards. But do advertisers want one-stop shopping?

As digital is changing the ad game from top to bottom, expertise is up for grabs, as is the need to secure acumen in social media, mobile marketing, and search. Media companies and advertisers are just the newest strange bedfellows on the digital block.

The precedent is actually decades old. TV stations, cable companies and print publishers have long assisted small local advertisers by producing radio or newspaper ads. That trend is now going big-time, big-spend, big-client, and crossing old-guard dividers.

Wallpaper magazine founder Tyler Brûlé raised eyebrows in 1998 when the then-Time Inc.-owned publication started producing ads through Brule's Winkmedia (now Winkreative) subsidiary.

Since 2006, Meredith Corp. has bought a half-dozen agencies with expertise in everything from viral buzz to mobile marketing, including BIG Communications and The Hyper Factory, and its digital revenues topped at $83 million in 2008.

Rolling Stone, Maxim and Vogue also offer in-house agency services to advertisers, while NBC Universal also offers creative services as part of its array of film and entertainment properties.

Econsultancy argues that this is a trend that's long overdue, particularly as ”digital moves quickly. A media company's first-hand experience in the digital trenches may make up for any shortcomings elsewhere.”

So in a world where bigger once meant slower, is speed the new black?

"Last year we were doing over 30 custom programs per quarter, and now we're doing 50, and often people were asking us, 'I have this other thing I need you to do.' And we had to pass on it,"Conde Nast's chief revenue officer Drew Schutte told AdAge. " So we thought, 'Why are we turning them away?'"

Value-added service is now integral to securing long-term, exclusive relationships between publishers and advertisers, it seems.

"Major marketers are shifting spending away from traditional media, especially magazines and newspapers, and towards digital, promotions, direct marketing, public relations, in-store and other unmeasured disciplines," Christopher Vollmer, head of the heads media and entertainmen practice at Booz & Co., told AdAge.

"Media companies who want to capture more spending need to therefore build expertise to play in these higher-growth areas."

Of course, it's a trend that might make traditional agencies nervous, but also creates opportunities to reinvent their value proposition to brand advertisers.

As Conde Nast's Schutte commented, "In the digital world, there are these terms, 'co-opetition,' or 'frenemy,' so you're very used to working in a more transparent way. You're working with people who on another day might be your competition. So the way we saw it, it was an opportunity."