Media-Buying Shop Accuses Ground Zero of Breach of Contract

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SAN FRANCISCO ( -- California's Little Hoover Commission has passed over a challenge from Aegis Group's Carat USA over media-buying duties for the five-year, $125 million Department of Health Services anti-smoking campaign, according to James Mayer, Little Hoover executive director.

Media-buying firm Carat charged that Los Angeles advertising agency Ground Zero dropped it after the two firms jointly pitched the account.

Mr. Mayer said the challenge was referred to a joint committee of the California Legislature which in turn must decide whether to call for a media-buying audit by the California Bureau of State Audits.

John Barnes, executive vice president-managing director, Carat USA, Los Angeles, said his shop will continue to pursue its challenge with state entities. He claims Ground Zero did not meet a requirement of the original contract that required the agency to have purchased $20 million in media. Carat also says it can get better value for the state's media buying dollar.

Ground Zero executives declined to comment on the charges.

A state health department spokesman said: "Carat has raised many questions and the department is investigating the allegations."

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