STARCOM BUILT ON A FOUNDATION MEANT FOR GLOBAL EXPANSION: ROBERT BRENNAN

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Ask bob brennan about Starcom Media Services, a unit of Leo Burnett Co., Chicago, and he's quick to tell you what Starcom is not: "We're not a branded media department. We are a separate media specialist company."

Then Mr. Brennan, Starcom's president, explains the history behind the unit, which was formally christened in April.

"It grew out of an assignment I had to look at the best media practices around the world and develop a comprehensive business plan to ensure that the Leo Burnett Co. would always be one of the preeminent media companies in the world."

Importantly, Mr. Brennan, 39, says, neither he nor Starcom Chairman Jack Klues report to general agency management.

"We report into Roger Haupt, the CFO of the Burnett holding company."

That means Starcom can cut through the red tape and quickly invest in tools such as the Super Midas and Spot On "optimizer" software.

"I can invest in our research projects without having to ask anybody," Mr. Brennan explains. "We have to meet objectives of our business plan, but how we do that is Starcom's business."

MERGER TALKS

Starcom's independence allows it be nimble, a fact attested to by client Miller Brewing Co. In three months, Starcom staffed a 90-person team to work on Miller's media account.

"Bob's scary smart. Strategically, he's a real visionary," says Steve Buerger, Miller's director of media services.

Mr. Brennan realized that if Starcom was a separate business and not just a department of Burnett, and was going to be world-class, it could and needed to expand globally, either through mergers or acquisitions. Thus was born the current talks with MacManus Group about a global media alignment between the two companies.

Agencies pursue scale to lower overall cost structures, he says.

"Media buying assignments are increasingly becoming commoditized, in terms of fees," he explains, "so we have to have business models that allow us to respond to client pressures and still make a fair return on our investment. The game is going to be played on the strategic front. The true advantage for a client is not saving them 3% on a cost-per-thousand. The true advantage for a client is finding ways their business can grow 5% faster than their competition."

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