Close-Up: Perspective - Adland must look to new markets in merger-mania era

It has not always been the case that a columnist in a London advertising magazine could begin with the words ’international direct marketing, e-commerce and the Asian economic recovery’ and expect anyone to make it through to the end of the first sentence.

It has not always been the case that a columnist in a London

advertising magazine could begin with the words ’international direct

marketing, e-commerce and the Asian economic recovery’ and expect anyone

to make it through to the end of the first sentence.



Gentle reader, if you are still there, bear with me. For in the week of

AOL/Time Warner’s merger with EMI, the proposed Procter & Gamble

takeover of Warner-Lambert and Hutchison Whampoa’s e-commerce deal with

HSBC, these subjects are at the heart of the modern advertising

industry.



Just ask this week’s King of Madison Avenue, Bob Schmetterer, the

chairman and CEO of the world’s fifth-largest agency network, Euro RSCG.

Euro RSCG and - for that matter - Ogilvy & Mather’s internet operations

have blossomed on the back of their key respective clients, Intel and

IBM. These are, as Schmetterer observes, the new multi-national drivers

of agency expansion.



Microsoft, IBM, Intel, Philips and MCI Worldcom are the new P&G,

Unilever, Ford and General Motors.



Although FMCG and auto manufacturers will remain significant

advertisers, in the less mature world markets, they will leapfrog many

traditional advertisers’ spend within the next few years. Already, for

example, Nokia is the second-largest advertiser in China. This

development helps explain why Euro RSCG and Ogilvy are leading the fight

against non-traditional new-media specialists such as Agency.com.



One reason for Ogilvy’s head-start may not be immediately obvious: its

strength in direct marketing. OgilvyOne is perhaps - alongside Young &

Rubicam’s Wunderman - the only genuine global direct marketing

network.



Both are in this happy situation primarily because a shared historical

client, American Express, demanded it. Organic agency growth was always

inspired by this stick and carrot relationship with its clients. And, in

future, DM and interactive activities will become more

indistinguishable.



I don’t know whether P&G’s bid for Warner-Lambert will succeed or not,

but it is another example of the attention being paid by clients and

agencies to pharmaceuticals. In the week when the recent difficulties of

IPG, relatively weak in non-traditional advertising services, became

public, the new Holy Grail client list takes on an extra sheen.



If one accepts it’s already almost too late to get into new media and

direct marketing in the US, and perhaps Europe, eyes turn to a resurgent

Asia. Many major groups have similar needs: to fill their gaps in new

media, direct and, in some cases, media buying in the region(s) where

the greatest growth potential lies. The chief snag is there’s scarcely

anything worth buying. However, in the current frenzy, that’s almost

irrelevant.





stefano.hatfield@haynet.com.



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