UNRAVELLING THE AGENCIES: Rebrandings, mergers and alliances have made the agency scene more complex than ever. Robert Gray presents a guide to who owns whom

In the dim and distant past, understanding media buying operations was a straightforward task. Back then, buying was intrinsic to the offering of a full-service agency. No-one else did it - simple as that.

In the dim and distant past, understanding media buying operations

was a straightforward task. Back then, buying was intrinsic to the

offering of a full-service agency. No-one else did it - simple as

that.



Yet as the media landscape became more complicated, the need for

specialist skills grew more pressing. So media independents were born,

and this encouraged advertising agencies to spin off their media

departments into quasi-standalone businesses, often with different brand

names.



And now, after a flurry of mergers, acquisitions, alliances, joint

ventures and rebrandings, the media planning and buying scene is a

complex web of businesses that can baffle even the most experienced

advertising sales person.



But help is at hand. The table on this page offers a user-friendly guide

to the ownership of the UK’s top 20 media operations.



So why should media owners - and their sales teams, in particular - need

to know any more about a media agency than its client list? Well, for a

start, the sheer importance of media agencies in the marketplace makes

them worthy of more than superficial scrutiny. It is a sobering thought

that in September 1999, the top 20 media agencies in the UK shared

between them billings of pounds 5.3 billion - a colossal amount of

business by anyone’s measure.





Consolidation



Building good relationships with media buyers opens the door to more

business. However, to really understand the buyers’ perspective, the

media sales person has to be aware of the environment in which buyers

work.



There are questions you should ask yourself. For instance, are agencies

free to do more or less what they want for their clients, or are they

constrained in certain areas because they belong to a bigger group, with

all the politics such relationships entail?



’I think that in order for advertising people to have credibility, they

need to understand the overall ownership of a media agency,’ says Trista

Grant, managing director of BBJ. ’It’s a pertinent issue and I would be

a little disappointed if a sales person didn’t know. I would feel they

had not done their homework.’



MediaCom TMB’s joint managing director Nick Lawson agrees that it is at

least ’helpful’ when sales staff are well informed.



That sentiment is shared by many in media sales - although even some of

the more accomplished admit it can be difficult to keep up with all the

changes taking place in the sector.



’I doubt whether the majority of people know who owns what,’ says IPC

Music & Sport’s group sales manager Martin Corke. ’They probably

wouldn’t have a clue. But then, for the most part, they don’t really

have to know what the parent companies of agencies are. The most

important thing is to understand the clients. However, it may well help

if you can understand where an agency is coming from.’



Virgin Radio’s acting sales director Lee Roberts says: ’It’s healthy for

anyone in the media sales environment to understand the basic principles

of ownership. As in other industries, consolidation is taking place as

agencies buy up other agencies.’



That consolidation seems to have accelerated over the past couple of

years. Today, the top 20 features only one media independent that is

fully privately owned - MBS Group. All the others are owned, either

wholly or in part, by other agencies or quoted holding companies.



The marketing services conglomerate Omnicom owns three of the leading

players - BMP OMD, New PHD and Manning Gottlieb Media - and it also has

an involvement in some of the smaller operations. The Interpublic Group

of companies (IPG) also has a trio of media agencies in its stable.

Western International Media and Initiative Media both belong to IPG’s

Western Initiative Media Worldwide network. However, for the most part,

they are run as separate entities in the UK, although they do co-operate

in some non-client-specific areas such as the development of planning

tools.



However, Lawrence Janes, Western’s marketing and business development

director, says: ’Neither Western nor Initiative has anything to do with

Universal in the UK.’ This, of course, might change should IPG review

its strategy. But for the most part, it seems to suit IPG to leave

Universal closely bound to the creative agency McCann-Erickson, an

arrangement that positions it as one of the last of the full-service

giants.





Mega-mergers



The biggest upheaval in the media agency market is the global mega-

merger of Leo Group, MacManus and Japan’s Dentsu to create a parent

provisionally known as BDM. This has implications for four of the top 20

media agencies.



Starcom, part of Leo Burnett, is being merged with Motive

Communications, which began life as the media operation of ad agency

Bartle Bogle Hegarty until it was spun off in July 1995.



The Starcom Motive Partnership (SMP) will become an operating entity

from April this year, with annual UK billings estimated at pounds 440

million.



It will operate out of Motive’s existing offices and will become the

Europe, Middle East and Africa headquarters for the Starcom global media

network.



BDM also owns MediaVest, which is to remain a separate operation in the

UK - at least for the time being. However, changes could take place in

other parts of the world.



The final piece of the BDM media jigsaw is CDP Media, in which Dentsu

has a stake of just under 50 per cent. The rest of the company is owned

by CIA Medianetwork’s parent company Tempus. Quite what the creation of

BDM means as far as CDP Media is concerned is unclear, even to its

senior management.



’I’m not sure what the effect will be in the short, medium or even the

long term. It’s a big question mark,’ concedes CDP Media’s managing

director Alan James.



What is more certain is that further consolidation among media agencies

lies ahead, concentrating buying power into fewer hands. Media owners

must not turn a blind eye to this because it is sure to affect how they

go about selling advertising space.





TOP 20 MEDIA AGENCIES

RANK NAME            PARENT           SISTER AGENCIES  CREATIVE AGENCIES

1    Zenith Media

     Services        Cordiant         Equinox          Saatchi & Saatchi

                                                       Bates Dorland

2    Carat           Aegis            BBJ, Feather

                                      Brooksbank       -

3    BMP OMD         Omnicom          -                BMP DDB, BMP4

4    Universal

     McCann          IPG              Initiative,

                                      Western          McCann-Erickson

5    MediaCom TMB    Grey             -                Grey

6    MindShare       WPP              -                J. Walter

                                                       Thompson, Ogilvy

                                                       & Mather

7    MediaVest       BDM              Starcom,

                                      Motive           Leo Burnett,

                                                       D’Arcy, Dentsu

8    Initiative

     Media           IPG              Western          Lowe Lintas

9    New PHD         Omnicom          Rocket           AMV BDDO

10   CIA Media-

     network         Tempus           Outrider, CDP

                                      Media, BJK&E     -

11   Optimedia       Publicis         -                Publicis

12   Starcom         BDM              Merging with

                                      Motive           Leo Burnett,

                                                       D’Arcy, Dentsu,

                                                       BBH

13   Manning

     Gottlieb

     Media           Omnicom (76%)    Allmond

                                      Partnership      OMD

14   Mediapolis      MPG              -                Euro RSCG Wnek

                                                       Gosper, WCRS

15   BBJ             Aegis            Carat            -

16   Motive

     Communications  BDM              Merging with

                                      Starcom          BBH, Leo Burnett,

                                                       D’Arcy, Dentsu

17   Western Intl    BDM              Initiative       -

18   Walker Media    Founders (50%)   -                M&C Saatchi

                     M&C Saatchi

                     (50%)

19   MBS Group       MBS              MBS Media,

                                      Expert Media     -

20   CDP Media       Tempus (50.1%)   CIA              Dentsu, CDP

                     Dentsu (49.9%)

Source: Campaign, AC Nielsen MMS.



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