Microsoft Splits $1B Media Duties Between Starcom MediaVest, Universal McCann

Incumbent Stays on Roster, While SMG Wins Global Planning, Strategy

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Microsoft has completed its media-agency review and will split duties on its estimated $1 billion media account between two agencies, Publicis Groupe's Starcom Mediavest, which will handle strategy and planning, and incumbent Universal McCann, which will continue to manage Microsoft's media planning and buying outside of North America.

Starcom MediaVest will handle buying in the U.S. and Canada, while Universal McCann will handle some 35 markets outside of North America.

"We have completed our media-agency review and have awarded our global-media strategy and planning business to Starcom MediaVest Group (SMG)," Microsoft said in a statement. "We look forward to partnering with SMG to drive exciting and engaging ways to deliver creative content to our customers in today's dynamic media marketplace. Universal McCann remains a valuable part of our agency roster and will continue to manage our media planning and buying outside of North America."

Microsoft, which also serves as a vendor for most media shops, ranks No. 32 on Ad Age's 100 Leading National Advertisers report, with its domestic advertising budget alone totaling more than $1.1 billion.

Though Universal McCann still remains on the roster, the loss of media-buying duties to Starcom in Microsoft's key North American market is sure to put a significant revenue dent in the Interpublic Group of Cos. agency, which has worked with the marketer for more than a decade.

The decision came swiftly, particularly for an agency review conducted by a marketer the size of Microsoft. The pitch process began with the circulation of a request-for-information document circulated to agencies and holding companies the first week of January.

In January, Microsoft's top marketer, Mich Mathews, told Ad Age that the review was standard operating procedure, but she also noted she wanted to bring media and creative closer together. She said: "The philosophy is that creative and media should work side-by-side from the outset. This was a big focus of mine last year. The results have been tremendous."

In a statement, Universal McCann said it is "proud of everything we have created together with Microsoft and we will continue to serve them proudly globally in the more than 35 markets around the globe."

The portion of the business Iniversal McCann lost is large enough that one would expect it to lead to layoffs, but the agency said that is not so, and that it anticipated this result in the review: "While Microsoft is a very important client, going into this year we were conservative in our planning and planned for this outcome. As a result, the impact on our financials and profit will be minimized; therefore this will have little to no exposure to our position/investments."

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