CLOSE-UP: LIVE ISSUE/CHIME - Francesca Newland writes on the bid Chime's Pure is making for in-house work

At best, trading conditions these days could be described as poor, so it seemed a little surprising last week when the Chime group announced the formation of a media operation called Pure.

Pure will be the amalgamation of all of Chime's existing media operations.

You could be forgiven for not knowing that Chime has any media operations, as they are all on the small side with flattering estimates putting their combined billings at £40 million.

The move sees the combination of AMD Media, First Financial and Osbourne Jack Media.

The most obvious question is why is Chime doing this now, when conditions are so severe. And the most obvious answer is that it is a cost-saving measure. However, Lord Bell, Chime Group's chairman, brushes such an explanation to one side.

"This is not cost saving, it's an attempt to increase our share of the specialist market, Bell says.

In fact, Andrew Jack, the former managing director of AMD Media who will run the new operation, is adamant that costs will rise as Pure is relocating.

Under the Pure banner, however, the agencies will maintain individual identities, as specialist agencies represent what Bell has identified as a lucrative market.

So far Pure has expertise in property, motor and financial media planning and buying. The launch of Pure is Chime's signal that it is attempting to move into other specialist arenas.

Ironically, it's a strategy that involves growing by staying small. What Bell is hoping to tap into is the £402 million-worth of buying which, according to MMS, is handled in-house. Direct/in-house buying, in fact, represents the fifth-largest entry in MMS's billings league (after Carat, Zenith Media, MediaCom and MindShare).

Suddenly Chime's plans have a ring of logic to them.

Bell says: "In a sense it's a counter-cyclical play, our business is growing at a time when the total advertising business is in decline."

"We're not trying to be the biggest and get volume discounts. Instead, we offer skill at buying specialist interests. What we do is offer service as opposed to bulk buying, he adds.

Chime's creative agencies, Roose and HHCL & Partners, are both struggling to maintain their positions in the creative agency rankings following a string of losses that includes Nestle, Thomson Holidays and Tango. The two agency brands are under close scrutiny right now, and a merger is not out of the question.

Once their future is determined, Pure media, as a bigger operation than, say, AMD Media, will provide a better full-service option. This could be another potential area of growth for Pure.

However, Paul Philips, the director of advertising and media services at the AAR, is a little underwhelmed by the new operation. He warns that although Pure will not be attempting to compete with the big media agencies in terms of bulk buying, it will be competing with them nevertheless.

"It's an interesting approach to take because media agencies have a depth of ability across client sectors, Philips says.

The formation of Pure is a logical step for Chime to take. As a specialist agency it might be able to muscle in on some of Britain's massive £400 million of in-house buying. One agency source describes it as "the arse-end of media and for as long as the big network-aligned agencies regard it that way, there is an opportunity for growth at Pure.

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