BIRTH OF A MEDIA-BUYING BEHEMOTH

Publicis-Bcom3 Will Control 12% of Worldwide Ad Spending

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NEW YORK (AdAge.com) -- Last week's announced marriage of Publicis Groupe and Bcom3 Group unites a pair of the most successful and competitive media networks in the business.

It also creates the world's second-largest media-buying group, which will control about 12% of worldwide ad spending. Publicis-controlled Zenith Optimedia Group currently ranks fourth; Bcom3's Starcom MediaVest Group ranks fifth.

"This catapults our holding company into the same league as [Interpublic], Omnicom and WPP media offerings in terms of global breadth," said Rich Hamilton, CEO, Zenith Optimedia Group Americas. Publicis owns 75% of Zenith Optimedia; Cordiant Communications Group owns the rest.

Simon Lloyd, CEO-deputy chairman of Zenith Optimedia Group Europe, said it's too early to tell how the media giants will be organized, but he suggested it may resemble the separate-but-equal footing at Zenith Optimedia.

Units kept separate
"We are keeping the Zenith and Optimedia

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brands separate," Mr. Lloyd said. "We still compete for the same business, but we share things that are non-proprietary. We make sure the back office is efficient so that the front office can compete."

One immense hurdle the union must overcome is potential car conflicts between Zenith Media's Toyota Motor Corp. and Optimedia's BMW with Starcom client General Motor Corp.

GM and Toyota are fierce rivals in the States. According to executives, Michael Browner, GM's executive director-media and marketing operations, has made it clear his company has zero tolerance for agencies with competing brands. Earlier this year, Aegis Group's Carat USA lost Ditech.com, a GM-owned mortgage company, after it won Hyundai Motor America. Mr. Browner couldn't be reached; a GM spokeswoman declined to comment, noting he hadn't discussed the issue with her.

Fierce rivals
Zenith Media and Bcom3 have been fierce rivals. Just last year, Zenith Media and Starcom faced each other in a shootout for the $500 million Walt Disney Co. pictures business. Starcom won by a hair's breadth. After that win, Starcom CEO Renetta McCann credited Zenith Media's prowess: "They are our most formidable adversary."

Now that two of the top five media shops will be under the same roof, is the competition worried?

"No, I'm not worried about it," said David Verklin, CEO of Carat. "This deal is yet another indication that the media agency business is a big influence in this industry. The league-leading performance of Starcom was clearly something that was factored into the deal by Maurice Levy. He understands media. He's got Zenith, after all. The real question is, Will Publicis be buying Bcom3 or are they buying Starcom?"

Jean Halliday contributed to this report.

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