Consolidation: Is bigger better?

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Consolidation-whether among media, clients or agencies-has changed the way marketing is handled, with more emphasis on cost control and efficiencies of scale, a panel of agency, marketer and media executives agreed at the Adwatch: Outlook 2003 conference.

"Leveraging size for efficiency is not going to go away," said David Bell, chairman-CEO of Interpublic Group of Cos. Larger clients increasingly exert pressure through their procurement departments to reduce marketing expense, he said.

Consolidation has brought about benefits for some media companies, said Lisa McCarthy, exec VP, Viacom Plus, the unit handling cross-platform deals at Viacom. But some argued size alone is no guarantee of success. "You can't beat the market if you are the market," said Jonathan Mandel, co-CEO and chief negotiating officer of Grey Global Group's MediaCom.

On the agency side, marketers can find variety in holding companies, said Andy Berlin, chairman of WPP Group's Berlin Cameron/Red Cell, New York, and co-CEO of Red Cell Network. That big agencies do bad work is a misconception, he said.

"It's not about finding the biggest stick possible. It's about finding the sweet spot," said J. Patrick Kelly, president-U.S. pharmaceuticals, Pfizer. (Read more: QwikFIND aao79i)

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