Deutsche Telekom introduces a new media operating model

• Telekom is fundamentally realigning its international paid media activities
• The change strengthens Telekom’s leadership position in response to the ongoing digitization of the marketing communications and media ecosystems

** November 15, 2017**: Deutsche Telekom is fundamentally realigning its international paid media activities by launching an innovative and progressive operating model for media across its European footprint, consisting of 13 Telekom subsidiaries. The implementation constitutes a radical redefinition of the company’s current media management approach. The change is necessary for the Group to future-proof its media operations and defend and strengthen its leadership position in response to the ongoing digitization of the marketing communications and media ecosystems.

The overarching ambition is to increase active guardianship and control over the Group’s paid media placements and outcomes, fundamentally re-defining the Telekom supplier arrangements. “The ambition of our new operating model is to drive greater transparency and flexibility across all facets of the increasingly complex media ecosystem”, says Dr Christian Hahn, Vice President Marketing Communications, Strategy and Media at Deutsche Telekom.

The new operating model consists of 5 components or lots, forming building blocks that cover the Group’s paid media activities:

• Lot A1: Media Strategy and Steering
• Lot A2: Media Analytics services
• Lot B: Campaign Planning & Buying services
• Lot C: Programmatic Buying Operation services
• Lot D: Search Advertising & Affiliate Marketing services

As defined in the Lot “Media Strategy and Steering”, the Group will strengthen its internal competence in order to ensure media-neutral strategy, collaboration and the steering of all activities in the operating model. The services for the other Lots will be provided by external specialist suppliers. To ensure flexibility, the Lots are implemented by each of the Deutsche Telekom subsidiaries in a way that fulfil the local needs and levels of services required.

The project team consists of a large, cross-functional, international team including the marketing, sales and procurement departments. The team executed four parallel tendering processes over a ten-month period, with a large amount of potential suppliers, ranging from traditional media agencies to specialist service providers, involved in a rigorous process.

“We have applied state-of-the-art elements of digital tendering across all the phases, resulting in an innovative and efficient approach on how to buy media services from suppliers,” says Volker Ross, Vice President Procurement Europe from Deutsche Telekom.

The new operating model requires a new kind of overarching cooperation between all parties involved. Therefore, intensive “collaboration workshops” were essential cornerstones in the tendering process to ensure successful cooperation going forward.

The first of the suppliers for the new operating model has now been selected with GroupM (part of the WPP group) appointed as supplier for Campaign Planning and Media Buying services. The successful GroupM operating agencies include Mindshare, MediaCom and MEC for most of the European subsidiaries, allowing the Telekom businesses to implement the optimal local solution. The new collaboration will start on January 1st, 2018. T-Mobile Netherlands and Hrvatski Telekom will remain with their current incumbent media agency partners for now.

The selection processes for the suppliers for Media Analytics services, Programmatic Buying Operation services and Search Advertising & Affiliate Marketing services are well underway. The launch of the complete media model is planned for the first quarter of 2018.