Omnicom media still under wraps

When Omnicom fought off Carat to buy Manning Gottlieb Media (MW July 31 1997), TBWA International president Alasdair Ritchie said mysteriously: “We are working closely with Omnicom on a number of initiatives in media which should come to fruition later in the year.”

The year has now ended.

Eurospace, the joint venture set up between TBWA and Carat in 1991 to handle the advertising agency’s media buying, finally stopped operating last week, six months after the two parties announced plans to scrap it. The first signs of a new “initiative” began last week with the appointment of Eurospace chief operating officer Charlie Varley as international sales and marketing director for Optimum Media Directions (OMD) – the agency set up by Omnicom across Europe in 1996 (MW January 8).

It is understood that major decisions about OMD both in the UK and across Europe – which Omnicom agencies will be included, what OMD will actually do and who will run it – will be made by the end of this month.

You could call the whole Eurospace/MGM episode, when Omnicom pulled TBWA’s buying out of Eurospace and put it into MGM while moving its TV buying into sister-Omnicom agency BMP Optimum, a missed opportunity for Omnicom. It lost the battle to bring Eurospace clients, including Seagram, Nissan and Beiersdorf within the Omnicom network.

Carat UK chairman and chief executive Ray Kelly says: “Omnicom in the shape of MGM did speak to the clients, but the clients said they were happy with the service they were getting and decided to stay with us.”

But one source claims the real reason there was no pitched battle for the clients, was that TBWA chief executive officer Paul Simons signed a “hands-off” agreement with TMD Carat managing director Mark Craze. Simons was too preoccupied with stopping any more of his advertising clients from defecting, not to mention key agency staff, following the merger of TBWA and Simons Palmer last January, to pitch himself into a fight with Carat.

Others have raised eyebrows at the choice of Varley to lead the search for new international clients. Comments on Varley range from “very good” to the very negative to “he is not really a team player. He needs to remember that other people have an opinion too”.

Omnicom has long been expected to turn OMD into a world-wide media brand. In France it is a successful brand under Viviane Prat, but elsewhere in Europe it is little more than a name on a door.

In the US, Omnicom has rebranded its US media unit Optimum Media. Last October, Michael Cooper, a senior executive from the TV network, Asia Business News, was hired to set up a media planning and buying service for DDB, BBDO and TBWA initially in Hong Kong and China.

To be decided in the next few weeks is what precisely will come under the OMD umbrella in the UK. One suggestion is that it will bring together all the media brands within the network – BMP Optimum, MGM, the part MGM-financed start-up agency The Allmond Partnership, New PHD – in which Omnicom has an interest through its minority share holding in AMV.BBDO – and possibly the media division of direct marketing agency WWAV Rapp Collins. The Allmond Partnership, under former Negotiation Centre director Nigel Allmond, will be chasing BT business in the 160m media review this spring. Allmond ran the BT account at his former CIA-owned agency.

Another possibility is that OMD will become a mass negotiation outfit, concentrating exclusively on TV buying. A hint of this comes from New PHD chief executive David Pattison who has gone on the record as saying the agency will become an enlarged media strategy specialist rather than a big buying shop. Is this another way of saying that New PHD’s buying will be done by OMD, leaving Pattison’s agency to concentrate on planning?

Either way the Omnicom style is to allow individual companies within the network to run themselves autonomously.

But there is doubt over what value there is in bringing all these brands together. And indeed whether it is practical, when Omnicom does not have a controlling stake in all of the agencies. According to some sources the idea has caused internal dissention, with some people feeling the idea is being imposed from the US.

OMD would not operate in the same way as, say, the WPP-owned MindShare, which has subsumed the J Walter Thompson media and The Network brands. With this model come the problems of shoehorning two different cultures and two different sets of senior personnel. But at least both are wholly owned and, therefore, integration is more manageable.

The logic behind OMD is clear. It should give coherence to Omnicom’s varied media interests. MGM, especially, will have a more defined role within the global network – at the moment Manning and Gottlieb report directly to New York.

It is also a clever way for Omnicom to have it both ways: on the one hand, claiming to be a mass buying point and leveraging huge discounts; on the other, claiming the media brands within OMD are separate and discrete agencies and so able to handle conflicting business.

Omnicom is now looking for a European head for OMD and is understood to have approached senior players from both inside, and outside, the media industry. By the time that appointment is made there should be a clearer picture of what OMD will actually be.

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