BBDO, DDB MEDIA MELD MEDIA CLOUT IN EUROPE;OMNICOM SET TO REVEAL U.S. BUYING STRATEGY IN NEXT 30 DAYS

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[paris] Omnicom Group's BBDO Worldwide and DDB Needham Worldwide have signed a letter of intent to set up a joint European media buying venture expected to be run by Viviane Prat.

Ms. Prat is chairman of a local DDB media shop called Optimum Media, which will serve as a model for the new operation.

MAY ANNOUNCEMENT EXPECTED

Clients have not yet been informed, but the deal is expected to be announced next month after a May 22 meeting of media executives from both agencies.

The move will create a single branded identity for Omnicom on the buying front to counter the power of Carat, which controls about 12% of all European media spending, and other groups such as Grey Advertising's fast-growing Mediacom.

CREATIVE MEDIA TARGET

In the U.S., Omnicom is likely to try to acquire an independent media buying company, believed to be Creative Media, New York. A decision is expected the week of May 13.

For now, Omnicom's new venture does not spell the end of The Media Partnership, a joint venture between the Omnicom agencies and WPP Group's J. Walter Thompson Co. and Ogilvy & Mather Worldwide. But it is a clear indication of a major shift away from buying groups that exist largely to negotiate discounts based on huge volume.

WPP is believed to be looking at ways of combining O&M's European media arm The Network and JWT Media Group.

" TMP was born of a different time when the requirement was volume," said Brian Jacobs, Carat network development director.

Omnicom had a 9% stake in Carat holding company Aegis but sold all its shares this month.

"Media is moving upstream, and strategy is becoming as important as volume-generated price reduction," said a European media executive familiar with Omnicom's media plans. "Both clients and agencies increasingly want the media planning strategy to be linked directly to the creative side, but no one wants to pay higher media prices as a result."

CONFLICT ISSUES RAISED

By taking on media planning and strategy as well as buying, Omnicom's new unit will face greater client-conflict issues.

"Because media strategy is now very critical in communicating brand image and positioning, clients may not be happy about seeing this element handled by a joint unit," the European media executive said.

There is concern, for example, about BBDO's $100 million European media buying account for German small-appliances marketer Braun and the smaller rival Moulinex business at DDB.

"I doubt whether a merger in Germany can and will happen; there are just too many conflicts that would hurt business," said a Duesseldorf-based DDB executive.

Jaeschke Optimum Media, a German buying unit set up by DDB in 1994, does media planning for Henkel's Poly hair color products, while BBDO Media Team plans for rival Wella. DDB's Heye & Partner handles McDonald's Corp., while BBDO has Pizza Hut in Germany.

Omnicom is considering calling the new operation Optimum, the name used in Germany and France, where Optimum already works closely with a BBDO company called Media Direction. In Belgium, DDB and BBDO work together through a joint company called Omnimedia.

TEMPLATE IN PLACE

"In general, the Belgian or French operation will end up acting as the template for combined companies in other markets, but the structure, organization and operation will vary," said the European media executive.

The deal will not include Omnicom's TBWA International agency, which will continue to work with Carat in a joint venture called Eurospace.

Contributing: Laurel Wentz and Pat Sloan.

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