Publicis moots £1.2bn merged UK media unit

Publicis Groupe is looking at merging the negotiation units of its two media networks, Starcom Mediavest Group and ZenithOptimedia, raising the possibility of creating a consolidated £1.2 billion UK media giant.

The company has created a global management board, operating under the name Publicis Groupe Media and chaired by the chief operating officer of Publicis Groupe, Roger Haupt, to investigate the potential benefits of consolidating backroom operations, including media buying, across the world.

The consolidation of the UK media operations of ZenithOptimedia, Starcom Motive and Starcom Mediavest would create billings in excess of £1.2 billion, which would only be matched in size by WPP rolling MediaCom into its GroupM proposition.

Jack Klues, the chief executive of Starcom Mediavest Group and a member of the PGM board, said that any consolidation would be done on a local level and with full transparency to clients.

"We have been targeting strategic improvements, primarily in some key western European countries and we intend to make some investments in select core markets relatively quickly," Klues said.

"While we will never combine our buying strength in the US, where our companies already enjoy sufficient clout to provide optimum pricing to clients, we will explore the viability of such a move in other markets where industry practice allows it and where our clients can benefit from fortified negotiating power," he added.

Haupt also stressed that the creation of PGM did not represent a move to merge the company's global media networks and that Publicis remained committed to a multiple brand strategy.

"In pursuit of market strength and greater client benefits, the board will continue to explore opportunities to streamline investments and support the core media product, including non-proprietary data acquisition and technology that is not client-specific," Haupt said.

Other members of the PGM board include Steve King, the chief executive of ZenithOptimedia, and Mark Cranmer, the chief executive of Starcom Mediavest Group EMEA.



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