Why Heineken Wants to Add a Second Global Media Agency Group

Publicis Groupe Incumbents Mediavest/Spark and Starcom Could Face Competition

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Credit: Andrey Rudakov/Bloomberg
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Mediavest/Spark and Starcom handle media planning and buying for Heineken in 30 markets around the world, including the U.S. But if the Publicis Groupe shops want to add to that list the more than 40 other markets where the brewer operates, they might face competition.

Currently Heineken uses a smattering of agencies in those 40 or so markets. But the brewer is taking a hard look at consolidating that business, too. Still, as Heineken goes through that process, executives do not want to rely on just one global agency network. So it is seeking a second global agency group.

"The decision to move to a two-agency roster was not prompted by anything SMG has or has not done," Gregory Kukolj, Heineken's global head of media and digital, said this week in an interview explaining the decision. (SMG refers to Starcom and Mediavest.) "We do feel however there is definitely value in tapping into two agencies, each with its own … skillsets."

The move follows Publicis Media's recent restructure and consolidation. Starcom and Zenith continue to operate as global agency brands. Mediavest and Spark joined to become Mediavest/Spark, and Optimedia and Blue 449 merged and rebranded to Optimedia/Blue 449. In the U.S., Heineken uses Mediavest/Spark.

Starcom Mediavest Group first won the Heineken business in 2012. Before that, Heineken had been using 14 agencies from six media networks. "We come from a situation where we were highly decentralized," Mr. Kukolj said. So adding a second global agency group is "a kind of natural evolution of our global media agenda," he said.

"You don't see in CPG organizations many global organizations who drive a global media agency by one network or one agency only," he said. "Our task is always to ensure the right level of expertise across all markets. And I think no agency is uniformly capable in all markets around the world."

He added: "Within the 30 markets we operate with SMG we have managed to ensure the right level of expertise through a one-agency network management. And what we want to do is to scale this faster and wider and ensure the right level of expertise across all the markets where we operate."

The decision will not lead to two media agencies working within the same market, he said.

"We will be going through a thorough exercise to understand where there is definitely value to potentially bring further consistency and congruency in the way we apply our global media agenda in these additional markets," Mr. Kukolj said.

For Starcom and Mediavest, the potential competition for Heineken work from an outside global agency group could create residual pricing pressures. That would exacerbate an already tough year for the agencies and their parent network, which lost its massive Procter & Gamble, Walmart and Coca-Cola accounts.

Mediavest/Spark referred calls to the client.

It's not clear whether Heineken will use a jump-ball process to award the new business. This is when marketers keep agencies on a roster and ask them to pitch against each other for various projects in an effort to foster creativity through competition. This arrangement is common for creative agencies, but not media agencies. Typically, business is divided amongst media agencies by region or scope – planning versus buying, for example – and multi-brand marketers tend to pool spending across their portfolio with one agency for spending efficiencies and scale.

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