WPP Group's J. Walter Thompson Co. and Ogilvy & Mather Worldwide are likely to combine their media-buying clout to create a $1.3 billion juggernaut as they negotiate network TV upfront deals this spring.
A number of executives familiar with the discussions called the upfront alliance "a done deal." But one cautioned: "While we have agreed to try this as an experiment during the upfront to see how it works, we could still decide not to do even the experiment."
GTE WIN WAS PROBLEM
This executive said O&M's win last week of the $80 million GTE Corp. account "threw a monkey wrench" into the plan, and that "there are still some smaller conflicts yet to be worked out with some package-goods clients."
GTE presents a problem because JWT buys media for Sprint Corp. JWT client Warner-Lambert Co., separately, is said to have concerns.
If successful, the upfront experiment would pave the way to the long-discussed consolidation of the U.S. media departments of the WPP Group agencies.
JWT CEO Chris Jones would only say, "There are discussions taking place with both Ogilvy and our clients."
The list of clients the agencies represent is formidable, including Ford Motor Co.; Sears, Roebuck & Co.; IBM Corp.; Eastman Kodak Co.; American Express Co.; and Unilever.
$1.3 BIL IN SPENDING
All told, the $1.3 billion they would bring to the network negotiating table is about on par with the two leading spenders in the category, Cordiant's Zenith Media and MacManus Group's TeleVest.
Expected to head up the negotiating team for the new alliance are: Jean Pool, exec VP-North America media buying services, and Ron Frederick, senior partner, national broadcast group director, both of JWT; and Larry Cole, exec VP-U.S. media director, and Peter Chrisanthopoulos, senior partner, president, broadcasting and programming, both of O&M.
None of the executives returned phone calls.
While the most obvious advantage of combining forces is clout to gain favorable rates, the marriage of two sister shops is fraught with peril. Zenith Media, for example, the joint media operation of Saatchi & Saatchi Advertising and Bates USA, has experienced some difficulties, in part due to cultural differences between the agencies.
Zenith faced a conflict during last year's upfront, said an insider, over whether Bates client Wendy's International should make a buy on one of the networks when Saatchi client Toyota Motor Sales USA wasn't happy with the deals that network was offering.
Those pushing for Wendy's to hold out were hoping that by presenting a united front the agency could get a better deal.
"You're always going to have conflicts like that in these situations," said an executive at one of the WPP shops. "But you work them out. The basic idea, of having more clout in the marketplace by combining the monies from both agencies, is still very sound."
Agency watchers have expected a JWT/O&M media merger since last year, when Martin Sorrell, CEO of WPP, said in an interview that merging the media departments of the two shops made sense in many markets.
The agencies already have joint media operations in Canada and Taiwan.
Contributing: Laura Petrecca
Copyright February 1997, Crain Communications Inc.