Potential $1 Billion Prize to Winner

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A correction has been made in this story. See below for details.

NEW YORK ( -- Federated Department Stores’ Macy’s in coming weeks will be the latest in a line of major marketers to establish its central agency relationship with a media buying and planning agency rather than a creative shop.

Six media agencies are currently in the hunt for control of the estimated $1 billion budget, currently handled in-house.

Six media agencies are currently in the hunt for control of the estimated $1 billion budget, currently handled in-house. The contenders are: Aegis Group’s Carat; Interpublic Group of Cos.' Initiative; Havas’ MPG; and Publicis Groupe’s ZenithOptimedia and Starcom, according to executives familar with the situation. Another cut is expected next week, with a decision coming by mid-February.

The agencies either declined comment or referred calls to Macy’s.

Media importance rises
The retailer’s review is more evidence of shifts in a landscape once dominated by ad agencies that had great control over marketing strategies and budgets. As the number and kinds of media outlets have multiplied with the rise of the Internet, cellphones and mobile content devices like iPods, insight into how and where to spend marketing dollars is at a premium. As a result, marketers such as Procter & Gamble Co. and Coca-Cola Co. have given once unthought-of amounts of control to the media buyers and planners that were once an afterthought in the marketing world.

“Media buying is more of a science than an art form,” said Ronnie Taffet, VP-public relations for Macy’s corporate marketing department. “It is more of an objective than a subjective process. Keeping a media agency of record makes sense.”

As for creative, “there are so many pieces of our business, we want to find a stable of agencies to work with them on a project-to-project basis,” she said. A slew of ad agencies are chasing a pair of creative projects. One is targeted at 16- to 21-year-old consumers; the other is a fall branding campaign.

Seeks stable
Macy’s most recent ad agency, Interpublic's Lowe, New York, was successful in building project work into an agency-of-record relationship, but Macy’s pulled back last year in favor of creating a stable of creative shops.

A spokeswoman declined to specify spending, but May Department Stores Co. spent $595 million in advertising last year, while Macy’s spent $353 million, according to TNS Media Intelligence.

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CORRECTION: An earlier version of this story incorrectly reported Omnicom Group's OMD was a contender. The media agency was in the review but eventually dropped out because of a conflict with retailer J.C. Penney's, according to executives familiar with the situation.

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