Consolidation to set pace in 2000

Predictions are almost invariably wrong. So, with sack-cloth and ashes already at hand, Marketing Week will offer you only one.

The theme of the year 2000 will be heavy consolidation across the marketing industry.

It’s already started, of course, in marketing services with the MacManus, Burnett, Dentsu deal. And so has the fall-out. Snyder Communications’ decision to seek a buyer (Omnicom if at all possible) has been fueled, at one level, by a unique set of conditions relating to its investors. But it is also a sign that life in the middle ground is becoming a lot harder. Tempus and Aegis take note. While on this topic, it would be no surprise to find Grey and Saatchi & Saatchi huddling together for comfort.

Trade bodies are experiencing the same pressure, and for much the same reason. They must keep pace with the growing size of the players they represent (and oppose) at a time when the traditional ‘guild’ qualifications which have defined them are becoming blurred and irrelevant. But never underestimate the power of corporate vanity. A merger between the SPCA and IPA seems conceivable. How, on the other hand, the IPA would ever come to terms with the DMA is a mystery to all of us.

Yet eventually something must give. Consolidation among media companies will demand nothing less. The blockbuster deal at the moment is the potential fusion of Carlton and United News & Media. Even if it is blocked, or miscarries, it seems certain to catalyse activity elsewhere. Could Granada or a foreign buyer step in? And if terrestrial TV companies are allowed to ‘rationalise’ and exceed their current market parameters, what will be the response of an aggrieved Mr Murdoch? Or indeed the cable industry, which itself is fast consolidating But events in the media sector are likely to be as nothing compared to the pace of change in the related area of communications. If Vodafone does not succeed in its takeover of Mannesman, there will surely be other mergers and acquisitions activity which will shrink the global telecoms community to a handful of players. 2000 could also be the critical year for the new global telecoms operating system. Will it be forged out of the Symbian alliance between Psion, Motorola, Ericcson and Nokia, or will Microsoft’s rival standard crush Psion through a series of backstairs deals?

But the biggest story, highly predictably, will be the shake-out of dot.coms. At some point during the year gravity must act on their vertiginous growth and bring down to earth the brand- and service-challenged also-ran majority of them. What a relief when real marketing finally takes over from stock-market hype.

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