Ad data processor Donovan Data Systems and Publicis’ Starcom Mediavest are going to war. CEO Michael Donovan (pictured below) runs one of Madison Avenue’s biggest operating system for media buys. Publicis Groupe Media was a big client of Donovan’s. In an attempt to keep the Starcom MediaVest unit as a client, Donovan flew to Chicago to make his bid to CEO Jack Klues.
It didn’t go so well with Donovan calling out Klues on Starcom secrets. He even produced some sort of written evidence, which affidavits refer to as a “highly confidential document.” You better believe Publicis wants to keep this under wraps as the document is supposedly a business plan of SMG’spotential joint venture and co-market a new data processing system that would be a tough competitor for Donovan. MediaBank has been making this new system. This is like Watergate, folks. These are plans, which Donovan should not have his hands on. It would put Publicis media unit at huge disadvantage if were leaked considering it contains the unit’s finances. [Please! Someone leak it to us! We love the brawl. We want front row seats!] Publicis has spent the last 10 months trying to make sure it never sees the light of day.
Mediapost has this timeline of events:
DDS Vs. SMG Timeline
2000: Starcom shutters highly regarded, but expensive in-house data processing system, begins using DDS.
2004: SMG signs a three-year contract with DDS.
2005: SMG offers to renegotiate its contract with DDS trough 2007 and extend a new contract through 2012. Offer would form a “partnership” in which it would help develop a new, state-of-the-art digital media system in exchange for some preferential terms/treatment. DDS declines. SMG says it will pursue an alternative resource for its digital solution.
July 2006: DDS receives a call from MediaBank to make a presentation on its systems.
August 2006: DDS executive James Biskupic presents to MediaBank.
November 2006: Nancy Oppasser hired to work on project to design a new media data processing system for MediaBank. December 17, 2006: Oppasser expresses her ethical concerns about access to proprietary DDS information.
December 18, 2006: Oppasser is fired.
February 2007: Oppasser shares her concerns with DDS.
May 14, 2007: Michael Donovan flies to Chicago to meet with Publicis Media Group CEO Jack Klues and CFO Frank Voris. Shocks them by revealing “confidential” document.
June 2007: MediaBank acquires Datatech. SMG begins the process of transitioning from DDS to Datatech.
October 2007: SMG begins hiring “temporary help” to aid in the transition, claims more than $1 million in incremental, temporary labor costs to manage the process. Begins processing its media transactions on parallel systems: DDS and Datatech.
Dec. 20, 2007: Judge denies SMG’s motion for a temporary restraining order that would require DDS to continue processing buys for SMG’s clients.
Dec. 31, 2007: Donovan pulls plug on SMG systems (except for Canada, the U.K. and GM Planworks).
January 2007: Publicis Groupe Media Executive Director of Digital Development Nick Pahade leaves agency to join GSI Commerce after leading the team that developed the MediaBank system for SMG.
Feb. 15, 2008: Wall Street Journal breaks “Ad Heavyweights Battle Over Software” story.
March 5, 2008: DDS unveils iDesk, MediaBank pitches OX at American Association of Advertising Agencies’ Media Conference and Trade Show in Orlando.
March 7, 2008 at 5:21 pm
[...] Roll on the floor… This is why we love Agency Spy [...]
March 7, 2008 at 5:26 pm
Wow. And here I thought the slew of blatantly fake “posters” and “print ads” Publicis satellite offices enter into award shows was the biggest thing this agency had to worry about.
March 7, 2008 at 5:50 pm
Yawn… media… online system… next.
March 8, 2008 at 12:05 pm
Mediapost did the best job on this to date (following a good story in The Wall Street Journal a few weeks ago and a blundering story in Ad Age) but has not yet gotten to the heart of the issue. In the timeline, Nancy Oppasser was fired after she raised concerns about her work at MediaBank. You need to get her affidavit and read it. She claims she and other programmers were reverse-engineering two of Donovan’s products and thought it was unethical and possibly illegal. My guess is that the document Donovan has was Starcom’s plan to sell the reverse-engineered products along with DataTech’s system. MediaBank bought DataTech last summer, so MediaBank is really DataTech with a bell and whistle attached. (If you want a great read, Google Eric Lefkofsky and InnerWorkings and see who the characters are behind MediaBank.) Starcom wants the world to believe that it now has a world-class media system rivaling Donovan. That’s nonsense. If it’s true, how come Starcom was in court last December pleading with a judge not to let Donovan pull the plug because $2 billion in Starcom media bills would not get paid? The judge, without hearing testimony, took one look at Starcom’s argument, along with Donovan’s claim of intellectual property theft, and tossed Starcom out the door. There is more to come on this, since the IP theft claim is still the subject of arbitration. What Starcom is doing is spinning their formidable PR operation overtime.
MR
March 18, 2008 at 2:47 pm
By way of introduction, my name is John Bauschard and I am the Chief Operating Officer of MediaBank.
The statement that “the heart of the issue has yet to be reached in the media” may be true, we agree. When all the smoke has cleared, you will find at the heart of the issue is a dominant legacy system that is incapable and unwilling to change to meet a rapidly changing industry’s diverse needs. MediaBank identified this complacency and lack of innovation and set out to produce a product that not only met the current industry needs, but offered the flexibility to grow and change as the industry demands. This phenomenon has happened numerous times in the enterprise software business, when it has taken an upstart with new thinking to deliver what a market needs. Competition is always healthy, and the ultimate winners are the customers.
To set the record straight, Nancy Oppasser was never an employee of MediaBank, she was a sub-contractor to one of our contractors. Performance issues arose early in her assignment, and we asked our contractor to have her replaced with a more appropriate resource. To be clear, we have never asked any employee or contractor to engage in unethical or illegal behavior. It is important to note that MediaBank has not been named in any litigation. Claims of reverse-engineering Donovan products are false. Most knowledgeable software developers realize that it is not possible to reverse-engineer software without detailed product specifications, product design documents and understanding of the product code itself. The thought that a program could be reverse-engineered based on a user manual, as some have claimed, is absurd and demonstrates disinformation surrounding this topic. See the Mediapost follow-up article on this.
To refer to MediaBank as “DataTech with a bell and whistle attached” is extremely inaccurate and undermines the hard work of MediaBank’s more than 140 employees who have developed a superior digital media product. If paving the way in digital media buying software to meet a key industry need is just a “bell and whistle,” then maybe a re-evaluation of what is important in the industry is necessary. The acquisition of DataTech has added the valuable resources, knowledge and the talent of a 27 year old company to create the most comprehensive media buying platform in the market.
Starcom is one of the leading innovators in the industry and we are confident that if, as you say, “Starcom wants the world to believe that it now has a world-class media system rivaling Donovan,” then this is because they truly believe this and have found a system that surpasses our competitor’s product.
Anyone who has been involved with enterprise solutions knows that these applications take a great deal of time and resources to develop and implement. It is also well known that the migration of new enterprise applications require both the new and legacy systems to run in parallel for a period of time to successfully meet the client’s needs. The success of this migration was potentially damaged by the disruption Donovan initiated when they threatened to “pull the plug” on SMG. However, our team worked tirelessly to ensure we were able to provide a seamless transition for SMG. We completed this transition in three months and SMG fully transitioned to MediaBank on January 1, 2008.
In conclusion, we are not surprised that our technology and product offering has disrupted the industry. Throughout history, companies that have established a monopoly in a wide variety of industries have struggled with the challenge and costs of replacing the legacy products that have brought them success. There will always be a time when a company is faced with the difficult decision of replacing an antiquated product with a new product and trying to evaluate the associated risks and costs. That’s the nature of business. As it relates to our industry, we feel that Donovan has not met the industry’s needs in a variety of areas, including digital media, and we have developed a product that we are confident meets the current needs of agencies. Our open platform also ensures that we are able to adapt quickly to changes in the future. We stand behind our product and the people who worked hard to develop it. This is an exciting time in our industry and we are extremely pleased that people are taking notice. However, we are also dedicated to ensuring that the information regarding MediaBank is true and reflects the nature of the people who make up our great company.
April 18, 2008 at 12:04 pm
With all due respect, Mr. Bauschard’s claim that SMG fully completed the switch from Donovan to Mediabank “in three months” and was fully transitioned on January 1, 2008 is absurd. SMG was in court on December 20, 2007 pleading with a judge to have Donovan continue to service SMG because if it didn’t, more than $2 billion in SMG client billings would be jeopardized. I’m told SMG is still sorting out the billing issue and will be doing so for more time to come. The real proof of the pudding will be when other media agencies abandon Donovan for Mediabank. When this happens, perhaps I’ll change my opinion of MediaBank.
MR