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
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
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
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
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.