Jack Klues is on a roll. The amiable chairman of Starcom Worldwide
has had a good year. He’s been made US Media Week’s media director of
1998, Starcom was voted best media agency by both Advertising Age and
AdWeek and new-business wins include accounts such as Heinz.
Then, on top of this, his parent company, Leo Burnett, stuns adland by
forming the BDM group with MacManus and Dentsu.
Klues and his partner, the chief operating officer, Bob Brennan, have
emerged as among the most powerful media buyers in the US market - and,
therefore, the world.
It all looked so unlikely last year when a proposed merger between the
then Leo Burnett media operation and MacManus’s TeleVest fell through
after a year of painful negotiations. Stories at the time blamed the
split on personal antipathy between Klues and Irwin Gotlieb, then boss
of TeleVest, now the man charged with launching MindShare in the US
marketplace. In fact, more than a touch simplistically, Gotlieb’s
departure has been viewed as the catalyst for the entire BDM deal. Is
life really that neat?
Klues dismisses the Gotlieb question: ’Philosophically, the two
organisations were at a different place last year.’ Gotlieb says the
same, albeit in a few more words.
Reading between the lines, the suggestion is of cultural and operational
differences between the juggernaut, TeleVest, and Starcom, with its
greater stress on planning.
Klues explains: ’Since that time, we have both evolved a shared vision
for the future of media. That vision is rooted in the importance and the
future of the strategic planning discipline, which - when married with a
powerful buying capability - produces the kind of results clients expect
If that’s the case then might we expect the BDM deal to lead to its
logical conclusion - merging the Starcom and MediaVest operations
worldwide to create a new international buying powerhouse?
The noises emanating from Chicago on the subject are muffled. ’No
operating decisions will be made until after the (BDM) deal closes,’
’However, we will work closely with our new partners to determine what
is in our clients’ best interests, including a possible merger into a
single brand in many, if not most, markets.’
’Most’ probably does not include the US and the UK, although nothing is
certain. But why does scale matter so much? Surely the evolving new
major buyers (OMD, MindShare, Western Initiative, Universal) can all buy
as cheaply as each other in the US, just as in the UK not everyone can
be achieving discounts on station average price or there would not be an
’Scale is especially important in that it provides a revenue stream that
allows for investment in superior people, systems and research,’ Klues
says. ’Once a company is in the top five, there’s very little
It’s clear Klues feels that a buyer has to be in that top five.
Consequently, in London it seems that Motive, the former Bartle Bogle
Hegarty media operation, will be merged into Starcom.
Where this leaves MediaVest, currently by far the larger agency in the
UK marketplace, is unclear. Klues declines to comment on the subject
beyond acknowledging it is unlikely that there will be three brands.
It is also unlikely that Starcom will halt its international shopping
spree. That was the rationale for the proposed media merger last
Europe - where Leo Burnett clung on to full-service status, and
MediaVest has struggled to establish a coherent network - is clearly a
’We will continue to make strategic investments in the region,’ is all
Klues will say.
If he sounds rather cagey it’s partly because of the newsworthy timing
of our interview, and partly because BDM happened so quickly.
Klues, a big, friendly bear of a man, appears to be one of the more
human executives in global media buying. But you can’t help feeling that
he will have a much more taxing time melding the two media empires
together than his relaxed demeanour suggests.