September 30, 2023

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What Medialink’s deal with UTA means for advertisers and agencies

Agency interlopers

Hollywood talent agencies have set out to disintermediate ad agencies for decades. In the early 1990s, CAA famously signed on with Coca-Cola to essentially act as “worldwide communications and marketing consultant.”

The collaboration yielded a suite of nearly 30 commercials that introduced the world to its animated polar bears with the tagline, “Always Coca-Cola.” At the time, the arrangement was perceived not just as a threat to Coke’s agency, then called McCann-Erickson, but to the industry as a whole. “If ad agencies lose their hegemony over the ad-making process and are forced to share their control of the idea-generation business with interlopers like CAA, it could threaten the careers of thousands of creative executives, in turn undermining the stability of the agencies for which they work,” wrote the New York Times in 1993.

But the Coke-CAA relationship dissolved after just four years and McCann maintained a stronghold on Coke work for years to come, only to be reignited again when the soda giant returned to the talent agency in 2000. That led to entertainment tie-ups such as Coke’s well-documented solo sponsorship of “American Idol,” as well as the birth of a proper marketing division with CAA. 

CAA Marketing division re-emerged as a true competitor amongst the agency set in the early 2010s with its pop culture and branded content successes for Chipotle, which led to multiple Grand Prix at Cannes. It also boasted leadership of seasoned ad industry vets such as Jae Goodman, Jesse Coulter, David Messinger and Lenny Stern. But in 2017, CAA gave up control of the marketing arm when Stagwell Group acquired the division, which went on to rebrand as Observatory, operating under the leadership of Goodman. Stagwell initially acquired a majority stake in the company from CAA but now has 100% ownership.

‘Old-fashioned view’

Other more recent moves by talent agencies to get closer to marketers also did not pan out as intended. In 2013, talent agency giant William Morris Endeavor took a financial stake in creative agency darling Droga5 in a deal estimated at $225 million. But Droga in 2019 severed its relationship with WME when it was acquired by Accenture Interactive.

One longtime agency executive said that ad agency/talent agency deals can be rocky because their priorities are not aligned. “The talent agencies are less interested in, say, AT&T’s long-term strategy, they just want 10% of the deal,” he said. “Ad agencies care about the long-term business objectives of their clients.”

Responded Zimmer: “That’s a very old-fashioned view of the world and anyone who spends a little time understanding the talent agency today knows we are diversified and involved in multiple relationships, streams of income looking to more platforms. We are able to help anyone who wants to accomplish anything in the media business— we can provide insights, access and activation.”

”If you are looking to commission—if you are in the talent business for that—well that is not the agency of today. It’s no different than the creative agencies we work with on a very direct basis,” said Kassan. “Agencies are not about making expensive commercials, they are about bringing brands the right strategy and advice, and if that’s something that makes us competitive to them, so be it. Strategy is not a dime a dozen. The opportunity [UTA and Medialink] has to bring together an understanding of brands and talent is a universal selling proposition.”

Can it work?

But whether MediaLink and UTA can win over brands remains an open question.

“I see this as a really good complement within the creative agency ecosystem,” said Jae Goodman, the founder and CEO of Observatory and a former CEO of CAA Marketing. “I already call Michael Kassan for advice. This would make me as likely or more likely to call him for insight. I deal with UTA all the time, and there’s one more person at UTA who actually understands how the marketing ecosystem works.”

“The thing that makes this interesting versus past iterations for me is the timing in which it’s happening,” said Todd Hunter, a former chief creative officer at Observatory who is now co-founder and chief brand officer of Offfield. He added: “We have to do something different. And what could be interesting is maybe this is the time where, with this kind of marriage of media entertainment, Madison Avenue could finally be coming to have its moment.”

See Ad Age’s 2021 Marketers of the Year here.

“So far it hasn’t worked,” said Avi Dan, founder and CEO of agency search consultancy Avidan Strategies, about talent and ad agency combinations. “But that doesn’t mean it isn’t a good idea. And it doesn’t mean that it won’t work at some point.”

“We are building a bridge [between talent and marketers] with one of the ultimate leaders and most well-regarded strategic thinkers in the marketing world,” said Zimmer. “If we can’t figure it out with Michael Kassan, then nobody can figure it out.”

Contributing: Ann-Christine Diaz


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