Starcom MediaVest Drops DDS in US
Donovan Data Systems (DDS), which has a stranglehold in the USA, similar to its dominant position in the UK, has suffered a rare but significant client loss. Advertising Age and the Wall Street Journal are reporting this week that Starcom MediaVest Group’s US business has moved its spending power from DDS to MediaBank, a software company that acquired DDS competitor DataTech last year.
The impetus for the switch was the digital explosion, which brings new issues for buying and billing that did not exist when DDS was engineered. Advertising Age states that “SMG has made no secret of its frustrations with DDS”, but the break-up between the two companies has become bitter, ending in court.
Ad Age adds: “Despite its grip on the industry, losing a network the size of SMG, which handles about $17 billion in billings in the US, is a big blow to the software provider, especially since it could spur other agencies to switch. The media industry has long recognised that DDS is ‘not where it needs to be’, according to one executive at another top media agency.”
Donovan is expected to unveil an upgrade to its software for digital media buying at the 4A’s Media Conference in Orlando this March. Ad Age ponders: “Is this the beginning of the end for DDS? It all depends on how its new product is received next month. But it isn’t a good sign for the company that media execs from many different agencies are said to be considering other options.”
As to the court action, the WSJ reports that DDS “has accused one of its former customers, Starcom MediaVest Group Inc., of stealing trade secrets”, whilst Advertising Age states that “SMG filed a breach of agreement suit against DDS in December, claiming that the company tried to prematurely end its contract when it discovered SMG was intending to move to MediaBank.”
Laura Desmond, the CEO of Starcom MediaVest Group, said: “Our decision to focus on the digital explosion really led us to a new exploration of system,” she said. “It’s based on data and facts and where the consumer marketplace is going… We work with clients who are leaders in their own marketplaces. They expect us to take leadership positions.”
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