Ah, those salad days when media was no more than a ‘Five to One’ option on the pitch agenda. Now, by contrast, there is little structural change within the advertising industry which is not led by media operations.
The trouble is, the kaleidoscope of change has become so complicated that even key players have difficulty in comprehending it.
Take TBWA’s decision to pull out of Eurospace. This is no isolated tiff between a middle-rank agency network and an all-but-anonymous European buying shop. In effect, Omnicom, which owns BBDO and DDB as well as TBWA, is saying it no longer wants to play ball with Carat, Europe’s largest media operator – and owner of Eurospace.
Carat won’t be too happy about that – and for good reason. Eurospace has no significance as a company except as a TBWA shop. If TBWA clients decide to take the Omnicom option, rather than stick with Carat after the six-month notice period expires – bye bye 200m billings. Explain that one to your institutional shareholders.
Of course, what these TBWA clients might like to know, before they move, is what precisely the ‘Omnicom option’ means. So would the rest of us, but it remains tantalisingly mysterious. Evidently, Omnicom plans in some way to maximise European buying leverage across its three networks, particularly DDB (Optimum Media) and TBWA. But, as the WPP experience shows, all-encompassing media mergers are not necessarily the easiest way forward. More likely, (if its past conduct is any guide) Omnicom will plot a relatively cautious route. It will perhaps seek to retain existing media brand names where there is little advantage in mega-volume buying and concentrate its resources where they will be most telling: in TV buying. The Negotiation Centre at CIA provides a possible model, suitably positioned and branded.
But personnel is as much of a key issue for Omnicom as strategy. Who, or what, will lead this putative media organisation? Recruiting internally could be politically tricky. Industry speculation has therefore fixed on potential outsiders to provide the necessary cement. And what easier target than Manning Gottlieb Media, an independent part- owned by TBWA, which was recently negotiating a similar pivotal role with the Lowe Group (MW June 5)? Interestingly, Carat is also a part-owner of MGM, so there could be more than a little tension on that front.
Whatever the precise nature of Omnicom’s plans, they are likely to have a catalytic impact upon the rest of the media scene. Quite apart from the Carat issue, WPP and CIA will have to think out their positions more clearly. And IPG may well be obliged to force the pace of an Initiative, Western International and Universal McCann media coalition. But these problems are as nothing compared to those of the remaining single networks, like Grey, Leo Burnett and DMB&B.
News, page 7