LIVE ISSUE/MEDIA STRATEGIES: Players vie for a place on the global media stage. Media’s giants are looking for merger opportunities. Why? Claire Beale reports

It’s only February, but already the media dominoes are starting to wobble. Just count the number of global media news stories in the business press over the past few weeks - evidence of the chain reaction predicted when WPP announced the launch of MindShare.

It’s only February, but already the media dominoes are starting to

wobble. Just count the number of global media news stories in the

business press over the past few weeks - evidence of the chain reaction

predicted when WPP announced the launch of MindShare.



Combining the media might of J. Walter Thompson and Ogilvy & Mather

would, wisdom had it, trigger a similar marshalling of global media

forces among WPP’s competitors.



In the past month alone, Havas, the French communications giant, has

stamped its mark on the US media scene with a major acquisition, Omnicom

has found itself a worldwide media chief and the MacManus Group has

renewed its efforts to create a global media force.



So what’s the rush? There are, of course, those who see no urgency in

the quest for a strong global media network. Indeed, there are still

those who have yet to see the need for a global media network at all.

But in January, John Wren, the chief executive of Omnicom, boldly

predicted ’in four or five years, there will be three or four

world-class media brands, and then there’ll be everyone else’. Words

guaranteed to cause a tremor in the foundations of all but the biggest

agencies. Now is the time for filling in the cracks. Fast.



If you believe Wren - and he is by no means alone in his assumptions -

size and resource will be crucial for the survival of even the

fattest.



The problem is, if you look at the agency line-ups, there are already

four groups way ahead in the global stakes, which means that the rest

have to tie up to guarantee a place at the finishing line.



Almost neck-and-neck, since Omnicom’s acquisition of the GGT Group, are

Omnicom and WPP, with estimated worldwide gross incomes topping dollars

3.4 billion, followed by Interpublic on an estimated gross income of

dollars 2.8 billion and Dentsu with dollars 1.9 billion. Dentsu, most

agree, is unlikely to play a part on the global media scene for cultural

reasons and because it has different priorities.



For the rest, this year will be one of merger and joint venture talks,

with everyone already said to be flirting with everyone else in a global

dating game where big is much more than usually beautiful.



The US is proving to be one battleground where the fight is almost over

before it’s really begun. The opportunities for growth by acquisition

are now painfully few. Interpublic snapped up Western, the largest US

independent media company, back in 1994 and last week Havas snaffled

SFM, the one remaining independent media operation of any size. For the

likes of Carat and CIA, hoping to enter the US, and even for the smaller

US networks such as Grey, DMB&B, Leo Burnett and Publicis, mergers or

joint ventures are inevitable.



In Europe, the picture is similar, although the independents are

stronger and snapping up a CIA or a Carat would provide one solution.

However, on a local basis, acquisitions are, again, not viable on any

scale. According to one observer, Spain is the only European market

where there is the possibility of acquiring an independent company that

could change an agency’s position in the market.



As always, some agencies are smarter than others. In the months since

Campaign last took a look at the global media stage, activity in some

quarters has been rife; in others, virtually non-existent. And not all

action is constructive. As one media chief whose hand is much sought

after, remarked: ’Some agencies have this idea that they ought to talk

to me, but they have no clear strategy and have not considered what they

can offer my company beyond money.’



In many cases, the media strategy is led by an agency chief (and not

always one from a media background) who has no direct experience of

media as a separate business. One European media boss lamented recently:

’Our global media direction is being spearheaded by someone whose

knowledge of media as a business would not make the grade in even a

second- rate European media company.’ Of course, it’s not unknown for

media old-timers in the UK to begrudge the fact that their train set now

forms a small part of an international network driven from across the

Atlantic. But there’s a lot riding on the people engineering new global

media brands.



So it came as no surprise last week when Omnicom appointed Daryl Simm,

one of the most powerful media men in the US, to lead its global media

operations. Simm, the top media executive at Procter & Gamble, with

responsibility for its global media, becomes chief executive officer of

Omnicom Media and president of Optimum Media Direction. Although only

36, he’s an old hand at recognising the importance of the media

function, having led the consolidation of P&G’s media services at lead

media agencies around the world and the general unbundling of P&G’s

media services.



No gasps of disbelief last month, either, when Ammirati Puris Lintas

finally woke up to the fact that its most valuable media executive was

already working within the agency group. After years of insisting on its

own global media expertise, Lintas recognises the experience it has on

hand at its media company, Initiative Media, and has appointed

Initiative’s chairman, Marie Jose Forrissier, to head its global media

strategy.



It finally seems as though agency giants across the US are awakening to

the exigencies of international media. We can expect less wobbling and

more toppling of those dominoes during the rest of the year.



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