In addition, Starcom presented a pitch that emphasized its strategic-planning capabilities rather than its buying clout as a means of differentiating it from longtime incumbent Interpublic Group of Cos.' Initiative Media, which has a reputation as a volume buyer. Initiative did not make the final round of the review, according to executives. The win was first reported on AdAge.com (QuikFIND AAM89J).
Starcom entered the contest, which began this past fall, already handling media planning for Disney's theme park division, as well as some corporate branding work. Sibling shop Leo Burnett USA, Chicago, handles creative on those accounts. Starcom CEO Renetta McCann, who led the media pitch, is said to have strong ties with Disney executives-strong enough that the agency was able to go after the theatrical media buying account even as its parent, Starcom MediaVest Group, pursued the U.S. portion of Sony Corp.'s global media review, which included its entertainment division. Starcom MediaVest Group eventually was dropped from the Sony competition, leaving the field to Omnicom Group's PhD network and incumbent Universal McCann, an Interpublic shop.
Zenith Optimedia Group's Zenith Media, jointly owned by Publicis Groupe and Cordiant Communications Group, was also in the final round of the Disney review. Executives close to the process said Zenith's very strong pitch for the business, which also emphasized strategic planning services, delayed what was expected to be a much quicker decision by Disney executives. Although some executives at Initiative in mid-December said it dropped out of the review due to a disagreement with Disney over fees, other executives in the review said Initiative was decisively dropped from the final round, which essentially became a shootout between Starcom and Zenith. Initiative did not return calls for comment.
Starcom veteran media buyer, Kathy Ring, exec VP-media director, is expected to be put in charge of the Disney account, relocating to Starcom's Los Angeles office from Chicago. Starcom has a satellite office in Los Angeles from which it handles promotional work for Philip Morris Cos.' Miller Brewing Co. Ms. Ring worked on Destination Films, a low-budget film company, when Starcom handled that account. Ms. Ring was unable to be reached for comment.
Ms. McCann and a group of Starcom executives will travel to Los Angeles this week to attend a transition meeting with Disney executives, at which time it will be determined on what date the winning shop will take over.
"This is a big win for us," Ms. McCann said. "We are totally excited."
The Disney account will "be run under the Starcom brand" rather than through a dedicated Disney agency as had been suggested earlier by executives involved in the review, Ms. McCann said.
The shop will be hiring. "We are looking for the best people in the marketplace," she said. "We will use people from Starcom, from the Starcom MediaVest Group and even possibly people from Initiative."
Disney has had a difficult year, chiefly because of its ABC Television Network, hit by lower ratings and a soft ad market. A poor-performing consumer products and home video division has sent Disney's stock plummeting from the mid $40-a-share range in May 2000 to $21 now. Disney initiated the review, according to executives, because it was exploring different media options beyond its longtime reliance on big broadcast buys.
Meanwhile, still unresolved is the $600 million shootout for Sony's consolidated North American media business. Executives close to the review contend incumbent Universal McCann has unofficially won the business, with the proviso that an arrangement be worked out to avoid conflict between fierce rivals Sony Computer Entertainment's PlayStation video-game console business (now at TBWA/Chiat/Day for creative, media buying and planning) and Microsoft Corp.'s Xbox, currently a Universal client. One scenario is that Universal McCann's deal would work in two parts. First, the agency would get Sony Music Entertainment, Sony Electronics, and Sony Pictures Entertainment. Then some 10 months later, Sony PlayStation would join. "There has been no final decision on any of this," said a Sony spokesman. "But it will happen soon."
Some executives believe, however, that Sony will give Omnicom one more shot at the consolidated business. Sony is said to be unhappy the holding company is pitching the business through PhD, which is not a top 10 media agency. The Japanese electronics firm is said to prefer working with OMD. However, that would put its theatrical business in direct conflict with movie studio Universal Pictures, a significant OMD client. Even if Omnicom were able to accommodate Sony, Universal Pictures would not be willing to share a roof with Sony, they said. A decision is expected in January. A Sony spokesman had no comment. Phone calls to PhD and OMD were not returned at press time.