WPP EXPLORES CREATION OF MEDIA-BUYING COLOSSUS

Concept: Merge Media Edge and Mindshare Shops

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NEW YORK (AdAge.com) -- Executives at WPP Group's Media Edge and MindShare met behind closed doors last week to accelerate the process of creating a holding company that
will put the media shops under one huge powerhouse.

A WPP media group will surpass the current 800-pound media gorillas, Bcom3 Group's Starcom MediaVest Group and Omnicom Group's Omnicom Media Group.

MindShare/Media Edge will have more than $30 billion in worldwide billings and almost 5,000 employees. Starcom MediaVest claims $16.5 billion in worldwide billings and 2,950 employees. OMG combines OMD, which has more than $15 billion in worldwide billings, with PhD, Creative Media and Advanswers.

No formal announcement
WPP has not announced formally the holding company. WPP has alluded to it as a possibility in corporate statements and in comments by WPP chairman-CEO, Martin Sorrell.

"We are putting together, finishing up the re-engineering, so that we can come out of this with all guns blazing," said a Media Edge executive.

Creation of the media rex follows WPP's October purchase of Media Edge parent, Young & Rubicam.

The venture will share tools and research and consult on some accounts; MindShare and Media Edge will retain separate identities to avoid client conflicts.

The executives working toward WPP's media group, led by Irwin Gotlieb, CEO of MindShare, and Beth Gordon, CEO of Media Edge, haven't come up with a name.

An industry trend
WPP's move reflects an industry trend. Havas Advertising created Media Planning Group for its lead media shop Media Planning, with about $7 billion in billings, and online media company Media Contacts. Publicis Groupe is putting together a media holding unit for Optimedia and Zenith Media, which it owns jointly with Cordiant Communications Group; Cordiant will own a minority share.

The only agency holding company that has not moved to form a large media combo is Interpublic Group of Cos., parent of Initiative Media -- which claims about $11 billion in worldwide billings -- and Universal McCann, with $14 billion. Interpublic is buying True North Communications, which owns TN Media, with estimated billings of $7 billion. Some media executives inside and outside Interpublic have suggested once the True North acquisition is final, Interpublic will dismantle TN Media and divide clients between Initiative and Universal.

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