Warner Bros. is planning to part with longtime media agency of record, WPP's Mediacom, and shift media-buying and -planning duties for its more than $800 million account to Omnicom Media Group, executives familiar with the move told Ad Age .
The shift is expected to encompass media duties for the Warner Bros.' Film Studios Unit, including New Line Cinemas, as well as Time Warner video.
It's a massive loss for WPP, which first acquired Warner Bros. as a client through its acquisition of Grey Global Group in 2004. For years the entertainment marketer had a healthy relationship with Mediacom. In 2008 it returned to the agency to hand it more work, giving it buying and planning duties for the New Line Cinemas unit that was folded into the Warner Bros. Film Studios Unit.
But now that Warner Bros. is shifting all of its business to rival holding company Omnicom Group -- the second-biggest agency company in the world behind WPP -- is a sign that something clearly went wrong between the agency and Warner 's marketing execs. This marks the second mega-account that Mediacom has lost to an Omnicomshop within the past 12 months; in December, the $1.4 billion U.S. media business for GlaxoSmithKline left Mediacom for PHD.
The only significant piece of business the agency has grabbed recently is media duties on the U.S. Tourism Account, just picked up by sibling JWT, but that will account for only a sliver of the revenue that Warner Bros. provided. The loss means that Harvey Goldhersz, who earlier this year replaced Doug Checkeris as CEO of the agency's largest market, North America, will need to ensure the agency works extra hard on the new-business circuit going forward.
Reached yesterday, WB representatives said they could not comment on the status of the account. Agency executives at Mediacom, WPP and Omnicom Media Group either declined to comment or could not be reached.
According to Ad Age 's Datacenter, Time Warner is the eighth-largest national advertiser with U.S. ad spending of more than $2 billion annually. At least two-thirds of Time Warner 's overall measured media spending is devoted to marketing Warner Bros.' movies, video and New Line Cinema. Warner Bros. movies alone had a measured media budget of $622 million in 2010.
In 2011 the studio's feature films include "Harry Potter and the Deathly Hallows: Part 2," "Green Lantern," "Sherlock Holmes 2," "Happy Feet 2" and "The Hangover 2." The group said that it is producing some 40 different TV series for the 2011-2012 season, and claims that Warner Home Video has 20.5% of share of the U.S. consumer spending on home video (DVD and Blu-Ray disc) combined.
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Contributing: Brian Steinberg