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Carat has sealed its deal to acquire Media Buying Services International, New York, the first part of a three-year strategy to make the European media independent a major player in the U.S.

"We plan to grow MBS organically, but if something else shows up we will consider another acquisition," said Stig Karlsen, a Dane who recently relocated to New York to become president of Carat/North America.

Mr. Karlsen said Carat wants to involve advertisers in event sponsorship and get involved in the Internet.

When the Carat/Media Buying Services talks were first reported (AA, May 20), Carat was said to be interested in an East-West strategy and had talked to International Communications Group, Los Angeles. International Communications Chairman-CEO Andrew Butcher is close friends with Matt Bryant, president of Media Buying Services, both being expatriate Brits who once worked together.

But Mr. Butcher continues to say International Communications isn't for sale.


Carat also is looking for an American to appoint as its U.S. CEO.

"I represent the Carat culture here," Mr. Karlsen said. "But we are not making the assumption we can just land here and know America. We will rely a lot on Matt, with his years of experience here, and with whomever we choose to be CEO."

Carat's primary strategy here will be twofold: convince its non-U.S.-based multinational clients to use its services in the U.S. and recruit major, blue-chip U.S.-based multinationals to the Carat fold.

"When we go into a new country, we pursue a two-way strategy," said Hans-Henning Ihlefeld, chief financial officer at HMS/

Carat, Wiesbaden, Germany. "First off, some of our international clients express the wish we would be in [the new] country. In the U.S. case, our clients Volkswagen, Philips and Kellogg will welcome a Carat office in the U.S.

"Secondly, we also hope to attract new international clients, [such as] U.S. companies now in Europe, for instance, McDonald's, Kodak or Coca-Cola, which are not yet working with us" across Europe.

Lorna Tilbian, an analyst at U.K. stockbroker Panmure Gordon, agreed Carat needed to make an acquisition here to legitimize its U.S. presence.

"You can go into Hong Kong with Volkswagen saying we'll give you a try, but you can't get into the U.S. that way," she said. "They needed that brass plate on the door."


So far, European clients aren't publicly committing themselves to working with Carat here. VW did not return calls; Philips confirmed the Dutch electronics group has an exclusive media buying agreement with Carat for Western and Eastern Europe but would not comment on U.S. plans.

Nor does it seem the U.S. agencies representing Carat clients have been notified of any changes. For example, a media executive at Arnold Communications, Boston, which does both VW's U.S. creative and media, said no changes have been discussed.

More difficult is getting U.S.-based clients to switch to Carat in their home country.

"We've been competing with Matt for a long time," said a media executive at a major New York-based agency. "I don't see why his hooking up with Carat will really change things."

Mr. Karlsen said he hopes otherwise, and he said Carat will bring elements to the marketplace that are indeed different.

"One of our strengths in Europe has been our expertise in research," he said. This leads to accountability, "how the media strategy effects marketing and sales."


Mr. Karlsen's claim is more than a sales pitch, said Roger Godbeer, global director of media, global sales and marketing effectiveness at Colgate-Palmolive Co.

Although Colgate isn't a Carat client, "Their research does stand out," he said. "They have some sophisticated media packages on the software side, and if they can duplicate that kind of data here I think they'll shake up this market. If they can give clients the kind of custom research they do in Europe, they will be a major contender here."

Crispin Davis, CEO of Carat parent Aegis, has built Carat's success in Europe-where it's the leading media independent with 11% of the market-by making it more than just a cut-rate media buyer.

The former Procter & Gamble Co. manager who came to Aegis with a new management team in November 1994-after a major cost-cutting and restructuring the previous year-has focused on prudent expansion and developing Carat's role as international media consultant to multinational clients.


With billings pushing $7 billion, "Carat has been a star performer," Ms. Tilbian said.

Now, with the acquisition of Media Buying Services, Carat hopes its foray into the U.S. will be equally successful.

At first though, it appeared Carat didn't know how to address the U.S. market. A few years ago, the shop tried hooking up with Western International Media, then the largest independent media buying service in the U.S. Western client Walt Disney Co. was looking for a European media connection, and Western President-CEO Dennis Holt introduced the two parties.

The plan was for Carat to then introduce Mr. Holt to a number of its clients so Western could service them in the U.S., as well as have Western continue feeding its clients to Carat.

But in a bitter falling-out, the informal linkup broke down, although Carat continues to represent Disney outside the U.S.

Mr. Holt, who declined to comment for this story, later sold Western International to Interpublic Group of Cos. Contributing: Dagmar Mussey.

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