OMNICOM PREPARES FOR ITS MEDIA TRANSFORMATION

Agency Networks to Shift Bulk of Operations to OMD

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NEW YORK (AdAge.com) -- Omnicom Group's transformation of OMD into a fully integrated media operation is imminent as the holding company prepares to transfer the bulk of the media operations from its three agency networks into OMD.

The consolidation of media planning and research from its three core agencies -- DDB Worldwide, BBDO Worldwide and TBWA Worldwide -- into buying operation OMD is expected to be formally unveiled within the next two weeks following client briefings.

Omnicom agency clients include powerhouse marketers such as Dell Computer Corp., McDonald's Corp., Pepsi-Cola Co. and Visa USA.

Hammering out details
In November,

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OMD announced Joe Uva would join as president and CEO on Jan. 1 with the goal of implementing the consolidation. Hired for his rainmaking and consensus-building skills, Mr. Uva has been hammering out the shift of planning and research duties with Omnicom agency executives.

Mr. Uva referred calls to Omnicom; CEO John Wren declined to comment.

"Nothing has changed since December," said an Omnicom spokeswoman. The reference was to Mr. Wren's comment at the time that "OMD will be a full-service agency with buying, planning and research," but that "there will still be strategic planning at [Omnicom] agencies."

Roles for agency media heads
The bulk of the agencies' media operations are expected to be merged into OMD, although some planning functions will remain with brand agencies. It's not clear what roles the current heads of the agency media departments will take within the new structure. DDB Worldwide Media Director Page Thompson, who did not return a call for comment, is believed to be taking a major post within OMD. TBWA's Worldwide Chief Media Officer Monica Karo also did not return a call for comment, while BBDO Director of Media John Belfiore referred calls to OMD.

To accommodate its expansion, OMD will move into bigger space in New York, likely taking over the Madison Avenue offices currently occupied by sibling direct marketing shop Rapp Collins, which could move into Omnicom's headquarters building.

Omnicom's agency networks have strong media operations and have long resisted the unbundling of media, specifically planning, from creative agencies. But agency executives realize they have to strengthen the OMD operation to better compete against the likes of Bcom3 Group's Starcom Mediavest Worldwide and Aegis Group's Carat.

Globally, Omnicom's combined media operations rank fourth in billings, according to the most recent Advertising Age magazine rankings, behind the media billings of Interpublic Group of Cos., WPP Group and Publicis Groupe.

Media-only accounts
After consolidation, Mr. Uva is expected to begin aggressively pursuing media-only assignments, which so far have proven elusive for OMD. Several observers said Mr. Uva's skills and experience on the sales side will give Omnicom a point of differentiation against rivals.

"If sellers are consolidated, they are now focusing on taking advantage of it with cross-platform sales. Therefore, on the agency side you'd like to have a strong media buying and planning operation," said Alexia Quadrani, an agency analyst for Bear Stearns.

Alice Z. Cuneo, Cara B. DiPasquale, Wayne Friedman, David Goetzl and Rich Thomaselli contributed to this report.

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