WPP Group media agencies are talking to Sony Corp. of America about rolling up a consolidated media buying and planning account potentially worth north of $400 million, according to executives close to the negotiations.
What started out as a review for the buying account of the movie division, Sony Pictures Entertainment, is morphing into a pitch to carry the entire media buying and planning for various units. The movie account is currently at Universal McCann.
Howard Polskin, a spokesman for Sony Corp. of America, the holding company for Sony operating units in the U.S., said there was no review for a media consolidation. But a proposal whereby WPP siblings The Media Edge and MindShare team up to handle a consolidated Sony media account began circulating within the last month, according to people familiar with the situation.
According to executives, the wider pitch potentially would include media business for Sony Electronics, Sony Pictures En-tertainment, Sony Music Enter-tainment and Sony Computer Entertainment America, the marketer of the PlayStation 2 videogame console. Gary Po-dorowsky, senior VP-strategic planning and marketing for Sony Corp. of America, is the point person for what has been characterized as early-stage discussions. Mr. Podorowsky was not available for comment at press time.
Any decision on a potential consolidation likely would come before the start of Sony's fiscal year on April 1. Sony's divisions have operated largely independently, with each unit employing its own advertising and media shops and implementing separate strategies. However, under the leadership of Howard Stringer, Sony Corp. of America's chairman-CEO, the company has attempted a greater level of integration and cooperation among its divisions. Moreover, Sony, like other major media brands, is looking to consolidate and cross market its various assets across multiple platforms.
Consolidating media at WPP could help Sony streamline media buying and planning, cross-promote various properties and drive a harder bargain in purchasing media.
A consolidation of Sony's media business would be a potential windfall for WPP. According to Competitive Media Reporting, Sony Pictures spent about $242.7 million in measured media from January through October 2000. For the same period, Sony Music spent $27.4 million in measured media, Sony Computer Entertainment America spent $45.2 million and Sony Electronics spent $99.1 million. Sony Electronics e-Solutions Co. runs e-commerce portal SonyStyle.com, which began advertising in November with an integrated campaign from WPP's Y&R Advertising which spent about $5 million.
Other divisions, including Sony Broadband Entertainment; Metreon, its retail operation in Chicago, New York and San Francisco; Sony Plaza Public Arcade & Sony Wonder Technology Lab are not significant media spenders. WPP's The Media Edge already handles Sony Electronics' North American media planning and buying; sibling Y&R Advertising, New York and Irvine, Calif., handles creative. The Media Edge is currently participating in the Sony Pictures review, competing against incumbent Universal McCann, a unit of Interpublic Group of Cos. and Zenith Media. (See story above). Sony Computer En-tertainment's media buying, planning and creative is handled by Omnicom Group's TBWA/ Chiat/Day, San Francisco. Sony Music handles buying, planning and creative in-house.
In developing its pitch for the movie business, Media Edge has had some discussions with sibling media shop MindShare, according to executives close to Sony. The Sony discussions signal a growing cooperation between the two WPP shops, which some observers see as leading to an eventual merger of the two media giants. Irwin Gottlieb, MindShare's CEO, acknowledged that the two shops are cooperating on some accounts but said they will remain two distinct brands. "The Media Edge is not going away," said Mr. Gottlieb. "It is an established brand with a long history."
MindShare handles buying and planning for Fox Filmed Entertainment, which includes the home video division. News Corp.-owned Fox bills about $150 million with MindShare.
Mr. Gottlieb strongly denied MindShare was involved in pitching the movie portion of Sony's account. WPP created MindShare in 2000 by merging the media operations of J. Walter Thompson Co. and Ogilvy & Mather Worldwide. WPP last October bought Young & Rubicam, parent of The Media Edge.
If WPP succeeds in landing Sony's consolidated media, it's unclear whether Fox would stay.
Combining theatrical and electronics media buying would make sense for any agency, because of the volatile nature of marketing movies. In order to do daily changes to movie media plans, agencies must have a dedicated TV spot department. But this can be costly.
"Sometimes you have studios cutting back from 10 releases to three, and you have people sitting around," said Andrew Lein, VP- account services for Palisades Media Group, which has clients Miramax Films, Fox Searchlight, and Artisan Entertainment. "You have to be like a rubber band. The idea of also having consumer electronics could be a stabilizer."
Contributing: Wayne Friedman
Copyright February 2001, Crain Communications Inc.