NEW YORK (AdAge.com) -- Three major media agencies -- Mediaedge:cia, MediaCom and Mindshare -- are merging their print buying departments. The three agencies belong to the WPP's Group M division, the world's largest group of media agencies.
Mindshare ranked third among media agencies in U.S. revenue last year, followed by Mediaedge at fourth and MediaCom at seventh. The three had combined estimated U.S. revenue of $473.5 million from media planning, buying and other services.
Outsiders pegged George Janson, the managing partner and director of print communications at Mediaedge:cia, as a likely candidate to lead the agencies' combined print operations. Mr. Janson and a Group M spokesman declined to comment.
The move will presumably offer Group M opportunities to cut a lot of costs in a business tied to print advertising, which has, of course, suffered during the recession and the rise of digital media.
Consumer magazines' global print advertising revenue will fall at a compound annual rate of 2.3% from 2008 to 2013, according to June's media forecast from PricewaterhouseCoopers. Newspapers' global print advertising revenue will plunge at a compound rate of 7.9% over that time, the forecast said. Global ad spending of all kinds, by comparison, will slip at a compound rate of just half a percent as TV retakes its 2008 level and digital and out-of-home advertising grow.
In January 2008, Group M took similar steps in another hard hit sector, local broadcast. The group took the local spot groups from each of the media companies and created two teams -- Team Motion and Team Matrix -- which handled from a Group M level all of the clients across Maxus, Mediaedge, MediaCom and Mindshare.
At the time, Group M Chief Investment Officer Rino Scanzoni noted the local TV shift was driven by a desire to establish best-in-class approaches to market forecasting, cost benchmarking, negotiation tactics and strategy, inventory management and scheduling. "Some of the systems and approaches to doing business at the three units varied considerably, and this move allows us to streamline our operations and make them more consistent across the board," he said then. "It provides us with more of an opportunity to develop best practices, as well as the facility to move our people more fluidly across the groups when needed."
Group M's move to consolidate print is also reminiscent of what WPP previously did in search marketing. WPP formed Group M Search in early 2008 to oversee the search-marketing efforts of its media-agency networks.
It isn't clear, however, what combining the agencies' print operations will deliver for advertisers. "Unlike TV, agency size doesn't give you leverage in print negotiations because each account is negotiated separately," an executive at a major marketer said. "I guess they could try to handle it like TV and make an 'upfront' buy that would incorporate all clients into a set discount based on agency volume. That might lead to the agency making recommendations that might not be in the best interest for the client as you may get back-doored into a title to make an agency deal work."
"One area where this might be beneficial," the executive added, "is that the size of the overall business may lead publishers to approach the group first with opportunities due to the sheer number of clients."
The combination seems likely to lead to some layoffs, although there was no confirmation of that today. That in turn, to publishers' likely chagrin, would mean fewer media planners and buyers particularly focused on print.
Mediaedge clients include AT&T and Activision Blizzard. MediaCom's roster includes Dell and JetBlue. Mindshare clients include Sprint and Unilever, although Unilever just went into review. Mindshare recently lost business including Bristol-Myers Squibb and Wrigley's, but it also won Zurich Financial Services Group's media account in June.
UPDATE: Group M has sent out an official release Aug. 21 announcing the news, reprinted below.
GroupM, the world's leading full service media investment management company, today announced a reorganization of the print units at its major operating companies.
The announcement was made by GroupM Chief Investment Officer Rino Scanzoni, who said the consolidation will affect all consumer magazine and national newspaper planning and implementation across Maxus, MediaCom, Mediaedge:cia, and Mindshare in the U.S.
GroupM Print will be divided into two distinct teams. Each team will operate independently of one another with separate personnel and management in order to provide a clear separation of conflicting accounts.
The two teams will be headed respectively by Scott Kruse and George Janson, who each have more than 20 years of print planning and buying expertise. Both will be based in New York and will report to Jeanne Tassaro, COO GroupM Implementation, who has led the industry in making print a comprehensive strategic and tactical media agency skill set with more than 25 years experience with the medium.
As GroupM agency veterans, Kruse most recently served as director of print investments at MediaCom, while Janson headed print communications for Mediaedge:cia.
"This consolidation will enable us to provide best in class print planning and buying skills across all four GroupM media agencies," Scanzoni said. "Combining these units will allow us to leverage our intelligence and scale to achieve the best value for clients."
Scanzoni added that the consolidation will allow for the centralization of all marketplace intelligence and print tools, drive to more accountability and better research data, and more consistent training and career development for staff.