Mediapolis has lost its battle to hang on to the 89m Peugeot-Citroë UK media buying account.
Peugeot-Citroë’s French parent, the PSA Group, finalised the decision in Paris on Friday, moving the account to the Interpublic-owned Initiative Media, in what is one of the biggest moves in media history.
The move will reverberate through the media industry and have a direct impact on Mediapolis’ and Initiative’s strategies.
“It was a commercial decision including value for money – but much more than that,” says a Peugeot UK spokesman. “The decision was also based on the ability to analyse the changing world of media opportunities and come up with creative plans.”
Some media buyers are expressing doubts about Initiative’s ability to drive the same kind of tight deals as Mediapolis because of its perceived lack of newspaper buying experience, crucial for the motor industry.
Mediapolis is known for squeezing media owners, as it recently demonstrated by refusing to buy space for PSA in News International titles for over a month following a spat over rates (MW July 3). But Initiative has plans to expand its newspaper buying resources.
Mediapolis’ merger with WCRS’s media department – the staff are due to move offices on August 2 – will go ahead and the 77m WCRS billings will be used to cushion the PSA loss. But without the PSA account, the merged agency – with billings of 220m – will only just scrape into the media top ten, pressuring its ability to negotiate deals with TV sales houses. Redundancies seem inevitable unless the business can be replaced.
The agency is known to be on a pitch list for an estimated 20m financial services account. Sources suggest it will also target the BMW media account, which Zenith won from WCRS last year.
“PSA was Mediapolis,” says one media buyer. “I cannot see how the agency can continue in its present form.”
Other sources see the move as a shot across the bows for French agencies, which in the past could rely on picking up French business. EURO RSCG Wnek Gosper handles all creative work for Peugeot and Citroë in the UK.
The PSA media decision could affect the progress of the proposed merger of Initiative and its sister media agencies Western Media International and Universal McCann.
It is known Interpublic wants a more powerful pan-European media operation but this is made more complex by possible conflict between Western, which handles Vauxhall Motors media, and now Initiative with PSA Group. One IPG source says the Initiative win puts the merger in jeopardy.
The business gives Initiative and its chief executive Phil Georgiadis total billings of about 340m, taking it to the number four slot in the UK.