MEDIA BUYING & PLANNING: PENDING MERGER CAN'T HALT URGE TO CONSOLIDATE MEDIA: GRANDMET GETS MORE AGGRESSIVE IN NEGOTIATING RATES

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International distillers & Vintners North America was searching for a print media-buying agency when parent Grand Metropolitan changed all the maps.

By proposing a merger with Guinness in May, GrandMet raised questions about continuing the search or waiting until the companies eventually joined.

SOLDIERING ON

International Distillers ultimately decided to soldier on, and on June 1 awarded Y&R Advertising, New York, the $50 million consolidated print buying account for it and sister unit Pillsbury Brands.

"We did take pause for a moment to ask [ourselves] whether we should continue or postpone the review," says David M. Eickholt, senior VP-corporate planning for International Distillers and point man on the review. But "we had no idea if the merger would be completed in a month or a year or at all, so we needed to move ahead."

The decision to consolidate reflects the desire of GrandMet and its subsidiaries to boost their marketing clout by consolidating their print buying at one agency from a host of shops.

RECENT WAVE

This move is part of a recent wave of media-account consolidations-most notably among pharmaceutical marketers (see story at right).

"We certainly thought we could be more aggressive in negotiating with the media if we spoke with one voice at one time," Mr. Eickholt says.

GrandMet is a force in the print-buying world, spending $54.5 million in 1996, according to Competitive Media Reporting. It spent $39.1 million on magazine advertising, making it the 29th largest marketer in that category.

International Distillers represented the lion's share-$39.1 million-of GrandMet's print spending, with the rest being divided among Pillsbury, Burger King Corp. and the parent's other subsidiaries.

But International Distillers historically wasn't able to leverage its position because media buying and planning were splintered among six shops that also did creative work for its brands.

For example, Lowe & Partners/SMS, New York, would handle print buying for Smirnoff vodka; Margeotes/Fertitta & Partners, New York, would take care of Bombay gin; and Mullen, Wenham, Mass., would be responsible for J&B scotch.

Brand agencies for Pillsbury products had a role in the buying for their accounts as well.

Meanwhile, McCann-Erickson Worldwide, New York, coordinated all the buying and planning efforts of the different shops, although it wasn't the agency of record.

This arrangement made some sense when International Distillers' three units-Heublein, Paddington Corp. and Carillon Importers-acted independently, Mr. Eickholt says.

CUMBERSOME APPROACH

But as International Distillers started consolidating operations in recent years-Heublein and Paddington were merged July 1-the decentralized approach seemed more cumbersome than it was worth.

"We saw it as a low-value-added but necessary activity," Mr. Eickholt says.

International Distillers started to reevaluate its buying strategy last November. The company decided the best strategy for it and its corporate siblings was to find one agency to do all the buying.

"The best package seemed to be to put it all together in one place," Mr. Eickholt says.

Besides Y&R, the contestants were McCann, Western International Media, J. Walter Thompson USA and Lowe, all New York. McCann dropped out because its client Nestle USA objected to the shop doing work for rival Pillsbury. Western dropped out to focus on existing client business.

International Distillers ultimately chose Y&R chiefly because of its experience in media buying and its personnel, Mr. Eickholt says.

"They had a specialized print media group within the agency that set the agency apart from the competitors in the pitch," he says.

International Distillers also moved its media planning over to Y&R. Pillsbury planning remains with its brand agencies, because Y&R already does that job for rival Kraft Foods.

WONDERING ABOUT FUTURE

While International Distillers apparently was pleased with its decision, it stoked the fears of some at brand agencies who were already wondering what would happen to them if the merger with Guinness is consummated.

"Nobody knows what's going on," says one insider.

But International Distillers is confident about what the consolidation means for its own business.

"We've made our agent more effective in buying and planning print media," Mr.

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