The region's media agency "dependents," including Initiative Media and Mediacom, are sharpening their skills and augmenting resources to win over third-party international clients, in addition to advertisers already signed to their full-service parent agencies.
Such a strategy has become crucial as Europe's media outlets are increasingly concentrated among a handful of giant owners, including Germany's Bertelsmann AG, the U.K.'s News International and France's Havas. Simultaneously, demands by clients for international services are on the rise.
"The continuing concentration of ownership means media companies are getting bigger and tougher. All media buying and planning agencies, therefore, need to get stronger for their clients," declared David Reich, chairman of independent buyer CIA Media-network Europe, London.
"International clients want to have one [media] agency across the region to ensure consistency and the top quality service they're used to having in one country," said Hans Raible, Initiative Media's Paris-based managing director.
These requirements have driven media dependents to set themselves up as autonomous entities to rival traditional independents such as CIA and Carat.
Unlike the situation in the booming 1980s, current media buying has grown in sophistication and strategy. Media agencies have become more qualitative, scientific and analytical, relying less on the large-volume, discount-buying techniques pioneered by Carat in France.
The road to independence started with the media agency networks centralizing their policy-making decisions.
In May, Mediacom, the media subsidiary of Grey Advertising, restructured to separate its European business from its U.S. parent. A new division called Mediacom Europe set up headquarters in Dusseldorf, the agency's biggest market. From there, Alexander Schmidt-Vogel, managing director of Mediacom (Germany), is responsible for developing Media-com as a full European network to grab new business. (Before that, each Mediacom office reported to the local Grey agency.)
"We increasingly see ourselves as independent," said London-based David McMurtrie, Media-com's director of international media. "We work separately and see ourselves as media specialists taking on clients other than Grey clients. The new structure gives us the opportunity to do more."
Mediacom now operates offices in almost every European country, including Eastern Europe.
Initiative Media, the media division of Ammirati Puris Lintas, has also embarked on the road to independence. Current third-party media clients include Club Med, the holiday marketer whose full service is handled by Bartle Bogle Hegarty, London, and sporting goods giant Adidas, whose main agency is The Leagas Delaney Partnership, London.
The media company has been taking on European multinational accounts since 1989. Each Initiative office had a European business manager responsible for coordinating international services requested by local clients. But the network was chained to then-parent company, Lintas Worldwide, and Initiative's bid for independence fell on deaf ears.
IN SEARCH OF AUTONOMY
"It has taken us from 1992 to now to get Initiative accepted as an independent concept," explained Initiative Media's Mr. Raible. The management team created when Lintas Worldwide merged with Ammirati & Puris in 1994 was instrumental in Initiative Media's present drive toward autonomy.
All Initiative's European offices report to the Paris headquarters, where chairman Marie-Jose Forissier ensures the local offices operate under a consistent policy. From London, head of international research Sue Elms streamlines the network's research facilities. A common European buying and planning policy is monitored from an office near Amsterdam. Individual offices, each of which has a senior media director to oversee international accounts, adapt these policies to local needs.
Mr. Raible believes this approach enables the network to be adaptable to clients' needs. Take for example, Adidas. Even though the client is headquartered in Ger-many and its main agency, Leagas Delaney, is in London, the sporting goods marketer coordinates media needs from Paris, and therefore works with Initiative Media's Paris office.
Apart from its Moscow and Romanian offices (the result of agreements with local agencies), all Initiative Media agencies in more than 20 European countries were developed organically by the parent company.
Initiative is expanding into Eastern Europe, and earlier this year opened offices in Turkey, Hungary and Romania.
Existing independent media agencies are most likely to feel the impact of dependents' conversion to independence. Carat, Europe's biggest media independent, with billings of more than $6 billion and a 12% market share, has said that expansion lies outside Europe.
The second biggest independent, CIA Group, with a 2%-3% market share and billings of $1.5 billion, does not fear competition from emerging independents.
Mr. Reich, who was promoted to chairman of the London-based European group in January, coordinates the agency's strategies and international clients' media buying and planning needs. As part of a move to centralization, Mr. Reich works with another subsidiary, CIA Medianetwork International, London. With additional offices in Milan, Dusseldorf and Paris, Medianetwork coordinates offices in about 15 European countries.
Instead of worrying about the newcomers, CIA is chasing after Carat's crown in Europe. It is focusing on boosting its market share in France and Spain, where it remains far behind Carat, and it is expanding its Eastern European operations. Currently, it has affiliates in the Baltic countries and Turkey.
Contributing: Bruce Crumley, Paris.