Opinion

Is Mitchells becoming more media reseller than agency?

Earlier this week I rang the boss of a media agency.

I wanted to sound him out on some speculation in the market.

“Is it time for the Harold Wimbledon rumour already?,” was the first thing he asked.  

You see, it’s well know in media circles that every year Harold Mitchell – boss of the Mitchell Communication Group –  goes over to the UK, watches the tennis at Wimbledon and hooks up with the likes of WPP boss Sir Martin Sorrell.

He even wrote about his trip to London in his column in the Sydney Morning Herald last week.

So it wasn’t entirely surprising to hear the rumours that have been doing the rounds for the last few weeks that go like this: a) Sir Martin Sorrell is losing patience with the sluggish performance of his Group M agencies (Mediaedge CIA, Mediacom, Mindshare and Maxus) in Australia; b) At least one of the TV owners is pissed off with Group M’s aggressive downturn-enabled buying stance and is pushing back, which is hurting; c) Harold wants to get bigger yet d) Much like the Murdoch dynasty, people ask whether his son Stuart really wants to take on the mantle

Different versions of this do the rounds on a regular basis. However, this time there seems a little more substance to it. It even reached a mainstream outlet with a piece on the front page of the business section of yesterday’s Sydney Morning Herald. In the piece, Julian Lee discussed the possibility of a tie up between Group M and Mitchells.

Considering Mitchells is already the biggest buying point with about $1bn worth of inventory – give or take – it would be a real behemoth. It would also be something the ACCC would have to show an interest in.

What does seem certain is that – regardless of whether it happens or not – discussions have taken place.

If it does happen, it would be a move that would accelerate a process already under way that I’m not sure is good for the market as a whole. Effectively, Mitchell is becoming (or arguably, has become) a media reseller rather than simple media agency.

He uses his scale across the major mediums to scoop up inventory, then sells it on to his clients. He’s able to give them a good price – so they’re happy. And he’s big enough that he’s one of the few media agency brands that the big media owners do not have the upper hand over.

Which is good news if you’re one of his customers and bad news if you are not.

Tim Burrowes

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