MEDIA PERSPECTIVE: Consolidation isn't simply a matter of all getting together

Aegis' optimistic trading statement last week offered some hope that the bath-shaped, V-shaped, double-dipped, or whatever-shape-it-is-this-week advertising downturn might be coming to an end. While Bob Willott explores the issues that Aegis faces elsewhere in this issue (p18), its situation throws up some interesting points surrounding that charred old chestnut, consolidation.

The independence of Aegis provides it with a point of difference compared with the other global media buyers, as its chief executive, Doug Flynn, pointed out recently in Campaign. His argument, that the consolidated conglomerates have lost good people and big accounts since merging their forces, holds some water but also ships some - Omnicom's OMD, for instance, was able to outmanoeuvre Carat to win the recent global Siemens pitch.

But at least Aegis' continued independence demonstrates that the pace of relentless consolidation inevitably slows down while the mega-groups get on with the fine points of actually merging. That's not to say Aegis won't be bought, but it is demonstrating that it can at least fight its corner as an independent.

Elsewhere, on both the media agency and media owner side, many are realising that the benefits of consolidation must be assessed carefully. Even those that are merging to create the super buying points, Zenith Optimedia, Initiative and Universal, are creating models that differ by market and offer varying degrees of consolidation.

Zenith Optimedia Group in the UK, for instance, will operate from three separate premises. It is likely to negotiate buying deals under one group buying director but will maintain separate teams. Manning Gottlieb OMD also rejected the conventions of a straight merger and is maintaining separate management teams and cultures while pooling buying negotiations.

Even within single media owners there are barriers to consolidation and, if we ignore ITV, these are not all related to the regulator and feisty competitors.

Take Associated Newspapers, for instance. Mike Anderson's recent move to managing director of the Evening Standard, while continuing to oversee Metro, prompted whispers that Associated would create a mighty consolidated sales operation within the next two years. But this is so far at odds with the current reality that it would be massive leap.

A senior Associated source recently confided that the sales operations are so separate, with different systems and ways of working, that issues inevitably arise on the rare occasions that clients demand they sit down at the table as a group proposition. My view is that this diversity, even within a single company, is no bad thing. What advertisers might lose in efficiency, they gain in diversity of offer and genuine, hard-fought competition.

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