A VIEW FROM THE MARKET ANALYSTS: Analysts from Wall Street and the City give their views on how the big agency holding companies are doing and what will happen

WHAT, IN YOUR VIEW, IS THE POSITIONING OF THE MAIN AGENCY HOLDING COMPANIES?

"The biggest three are positioned first and foremost on size. WPP, IPG

and Omnicom are $7 billion to $8 billion companies, while

the rest are $2 billion or below. The big three can say to big

clients: 'Give us your business and if we don't have what you want

already in the group we'll just go out and buy it.'"

WHAT ARE THEIR STRENGTHS?

"The WPP networks are the ones with the best asset names in the sense of

having huge amounts of heritage and history. That still counts for

something."

WHAT ARE THEIR RELATIVE WEAKNESSES?

"It has struggled to deliver organic growth." ... "Conquest/Red Cell has

continued to disappoint."

WHAT STRATEGIC DIRECTIONS ARE THEY HEADED IN?

"The biggest groups can't keep acquiring forever - there's a limit to

consolidation but WPP is the only one of the big three that has a clear

vision about where it can continue building - it wants to extent its

market research portfolio." ... "WPP is expanding in higher margin and

faster growth areas both operationally - below the line and integrated

market-ing services - and geographically, in Asia."

OMNICOM

WHAT, IN YOUR VIEW, IS THE POSITIONING OF THE MAIN AGENCY HOLDING

COMPANIES?

"Omnicom is clearly the most creative of the big three groups."

WHAT ARE THEIR STRENGTHS?

"Creativity. It gets more industry prizes and the perception now is that

industry prizes translate into new business. That's perhaps why it was

able to deliver 8 per cent organic growth last year."

WHAT ARE THEIR RELATIVE WEAKNESSES?

"There must be something. If I can think of anything, I'll get back to

you."

WHAT STRATEGIC DIRECTIONS ARE THEY HEADED IN?

"Omnicom has looked at talent agencies but it's small beer and short

term. Advertising's next big idea will not be to move into content

creation and joint ventures with entertainment companies." ... "Omnicom

has realised that in the multichannel age, it has to find different ways

to catch attention. I think it is one of the leaders in that respect."

IPG

WHAT, IN YOUR VIEW, IS THE POSITIONING OF THE MAIN AGENCY HOLDING

COMPANIES?

"IPG is a good, solid business."

WHAT ARE THEIR STRENGTHS?

"The McCann network is up there with the best of them."

WHAT ARE THEIR RELATIVE WEAKNESSES?

"The main question mark is over the strength of its other assets. Lowe

is unproven and FCB has never been a strong network."

WHAT STRATEGIC DIRECTIONS ARE THEY HEADED IN?

"Of the big three, IPG has the least idea about where it is going in the

long term. It has to find a way of joining forces with management

consultancy companies. But IPG has been playing with things like Brands

Hatch. Is it serious about motor racing? I don't think so." ... "The

future is about agencies moving into content provision. IPG has been

astute in hiring people who have a feel for this area. The future will

be about paid-for content, embedded advertising and advertorials. It

will return advertising to its grass roots."

BCOM3

WHAT, IN YOUR VIEW, IS THE POSITIONING OF THE MAIN AGENCY HOLDING

COMPANIES?

"Before the Publicis deal it was down at the bottom of the table

alongside Grey."

WHAT ARE THEIR STRENGTHS?

"Very US."

WHAT ARE THEIR RELATIVE WEAKNESSES?

"Very US."

WHAT STRATEGIC DIRECTIONS ARE THEY HEADED IN?

"The Publicis deal."

DENTSU

WHAT, IN YOUR VIEW, IS THE POSITIONING OF THE MAIN AGENCY HOLDING

COMPANIES?

"In the second tier of agency groups and the least internationally

developed."

WHAT ARE THEIR STRENGTHS?

"Dentsu is incredibly strong in its home market and historically it has

strong relationships with media owners."

WHAT ARE THEIR RELATIVE WEAKNESSES?

"Its lack of a global perspective."

WHAT STRATEGIC DIRECTIONS ARE THEY HEADED IN?

"It has thrown in the towel as far as truly global expansion is

concerned but a spin-off of the Publicis deal is that it will now focus

on becoming the Asian region agency par excellence. WPP (which plans to

derive one third of income from Asia and Latin America) and the others

will have something to say about that but Dentsu can make something of a

case for saying that it has a greater affinity for Asian cultures. The

strategy may look attractive for no other reason that Asia is an

economically high-growth region."

PUBLICIS

WHAT, IN YOUR VIEW, IS THE POSITIONING OF THE MAIN AGENCY HOLDING

COMPANIES?

"Even before the Bcom3 deal it looked the most dynamic of the

second-tier groups. But it knew advertisers knew that size matters and

that it was going to struggle to put a convincing case to the biggest

advertisers."

WHAT ARE THEIR STRENGTHS?

"Although not able to compete with the biggest it sold itself as a

global creative boutique and that has helped it keep a good track record

in new businessand in keeping accounts."

WHAT ARE THEIR RELATIVE WEAKNESSES?

"The most glaring weakness is its lack of marketing services

operations."

WHAT STRATEGIC DIRECTIONS ARE THEY HEADED IN?

"Consolidating the Bcom3 deal and making it work." ... "The Bcom3 deal

was stunning. It surprised many people."

HAVAS

WHAT, IN YOUR VIEW, IS THE POSITIONING OF THE MAIN AGENCY HOLDING

COMPANIES?

"Positioned itself as the group that is least reliant on straight

advertising, with more than 50 per cent of its business coming from

marketing services."

WHAT ARE THEIR STRENGTHS?

"The conventional wisdom these days is that if you have strong marketing

services operations you give yourself the strongest possible

opportunities for delivering organic growth."

WHAT ARE THEIR RELATIVE WEAKNESSES?

-

WHAT STRATEGIC DIRECTIONS ARE THEY HEADED IN?

"It needs to buy someone like Grey and it needs to do it soon. Its

weakness in media is hurting and will only hurt it more and more as

media continues to become more important in the whole picture. It will

hurt it especially in the States where its media offering is at its

weakest." ... "Havas is desperate to find the next acquisition and

though it would like to feel it could buy Aegis, I can't see Aegis

taking Havas' paper. I believe Aegis is destined for Omnicom."

GREY

WHAT, IN YOUR VIEW, IS THE POSITIONING OF THE MAIN AGENCY HOLDING

COMPANIES?

"Grey has no positioning other than being the group that is waiting to

be gobbled up."

WHAT ARE THEIR STRENGTHS?

-

WHAT ARE THEIR RELATIVE WEAKNESSES?

-

WHAT STRATEGIC DIRECTIONS ARE THEY HEADED IN?

"Sell." ... "I think the Procter %26Gamble agencies will eventually be

under one umbrella."

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