Publishers, Advertisers React to Group M Merger

Most Are Optimistic About Conglomerate's Promise of More Powerful Print Buys

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NEW YORK ( -- Print publishers and advertisers are taking a pretty sanguine view of the consolidation of four big media agencies' print operations, predicting that client conflicts can be handled and that smaller, independent publishers won't necessarily suffer. They seem willing, at a minimum, to wait and see.

WPP's Group M, the world's largest conglomerate of media agencies, last week said it is merging the print units at MediaCom, Mediaedge:cia, Mindshare and Maxus under one operation. The move did not seem like a big endorsement of print's future growth; it follows Group M's 2008 consolidation of its operations in local broadcast TV, another hard-hit advertising sector. But Group M said the combination was meant to make print buys more powerful for clients. "This consolidation will enable us to provide best-in-class print planning and buying skills across all four Group M media agencies," Group M's chief investment officer, Rino Scanzoni, said in a statement.

That would be more than welcome for publishers, who have long complained about bringing big, multiplatform ideas to agencies, only to receive insufficient consideration from understaffed departments full of junior employees. The combined print operations could create a print-centric unit that's big enough and full of enough senior people to give those ideas better evaluation.

News of the deal also immediately raised questions about how the combined agencies would handle conflicts among competing advertisers, such as Citigroup and American Express, which will both share a media agency -- at least for print -- after the combination. But Group M also explained that the newly consolidated Group M Print unit would include two divisions meant to alleviate that concern. The divisions will be headed by Scott Kruse, who had been director of print investments at MediaCom, and George Janson, who led print communications for Mediaedge:cia.

"Each team will operate independently of one another with separate personnel and management in order to provide a clear separation of conflicting accounts," Group M said. Messrs. Kruse and Janson will report to Jeanne Tassaro, chief operating officer of Group M Implementation.

Natural progression
The merger is a natural progression, said Simon McPhillips, director of media at Sprint, a Mindshare client. And the two teams should be able to handle any potential conflicts. "From a client's perspective, it's beneficial not only because of the additional discounts and added value one can get, but because you have a group of specialists who can share knowledge, tools and experiences with one another at a group level," he said. "So personally I welcome it."

Publishers' reactions varied, although most seemed willing to at least give the move some time.

"From a publishers' standpoint, this represents an opportunity and a risk," one magazine executive said, calling it less a judgment on print than a probable push for efficiencies. "If there are fewer people involved, they're going to be harder to get in to see. They may also come up with some centralized way to evaluate media. If you get a bum rap, you could be in big trouble."

"It could also be, they come up with some best practices and some more fair ways of evaluating different media brands," the executive added. "If they are able to do that, those titles that are solid should hopefully rise to the top and could actually do better than they would have before under four separate agencies."

The combination could definitely make life harder for independents, another magazine executive suggested. "Scale favors scale," he said. "George and Scott's time will be more in-demand than ever. It might favor the majors at the expense of the independents."

That remains to be seen, one independent said. "We are small so I'm hoping not," she said. "I loved that agencies like Mediaedge and Maxus spent time understanding us as a brand rather than a huge corporate conglomerate with a fab rate package and lots of bells and whistles."

Easier to deal with
Another said he wasn't worried about trading four agencies for two divisions of one agency. "It's fine that they are consolidating," he said. "It just makes it easier in dealing with two less groups of people and two less places to have to go for meetings."

A Group M spokesman said smaller independent publishers need not worry about getting lost in the shuffle.

"There's not going to be any problem with the allocation of time or resources for any publisher whatsoever," the spokesman said. "Every deal for every client will get whatever time and resources are required to get the best possible deal for our client. We will negotiate fully with every publisher according to the situation at hand, whether they are independent or part of an enormous conglomerate, it doesn't make any difference."

We'll have to wait to see, another print publisher said. "The earth is moving under us and this is just one of many changes coming to fruition. I have found these individuals and organizations to be fair-minded and receptive to new ideas. They want to represent their clients to the best of their abilities. This announcement won't change that. The mantra is be flexible and adapt. No whining."

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