Omnicom has signalled a major shift in its European media strategy this week and dealt a potential body blow to media buying operation Carat.
The shift became apparent this week after Omnicom-owned agency network TBWA terminated its contract with Carat-owned media buying agency Eurospace.
The move could be a huge blow for Eurospace, which has 200m billings from TBWA clients across Europe, because it appears to be part of a wider effort to link TBWA’s future media buying, through a new preferred partner, with a sister Omnicom media agency.
This is believed to be Optimum media, but plans could extend to another Omnicom agency, BBDO (linked to New PHD in the UK through its minority stake in New PHD’s owner Abbott Mead Vickers.BBDO).
This arrangement could offer clients huge buying clout through large volume deals. Eurospace handles 60m billings in the UK. Clients include Nissan, which accounts for between 35m and 40m of UK billings, Seagram and Beiersdorf.
There has been doubt over TBWA’s allegiance to Eurospace, and Omnicom’s media arrangements in the UK and Europe, for some months. Eurospace was a joint venture between independent Carat and TBWA, aimed at providing TBWA’s clients with a full service, but it is now fully owned by Carat.
Observers point out that the success of Omnicom’s move and whether it will in fact damage Carat will depend greatly on how smoothly Omnicom can implement a merged buying operation, as well as on the strength of existing client relationships with Carat.
Alasdair Ritchie, president of TBWA International, says: “We are working closely with Omnicom on a number of initiatives in media, which should come to fruition later in the year.”
TBWA notified Carat on Friday that its three-year contract with Eurospace, which was due for renewal at the end of June, would end. The relationship formally ends after a six-month notice period.
The implications for part TBWA- owned media agency Manning Gottlieb Media are unclear. Its ownership is split between TBWA, its managing partners Colin Gottlieb and Nick Manning, and Carat.